sustainable energy support for built · pdf fileexhibit 25- age of the hot water facilities...

SUSTAINABLE ENERGY SUPPORT FOR BUILT

ENVIRONMENT PROJECTS

REVIEW OF SUSTAINABLE ENERGY

OPPORTUNITIES IN THE HOTEL SECTOR OF

EGYPT (RED SEA AND SINAI REGION)

FINAL REPORT

Prepared for:

Prepared by:

AF-MERCADOS EMI (SPAIN)

September 2013

AF-MERCADOS EMI

SUSTAINABLE ENERGY OPPORTUNITIES AT THE HOTEL SECTOR IN EGYPT – DRAFT FINAL REPORT 2

REVIEW OF SUSTAINABLE ENERGY OPPORTUNITIES IN

THE HOTEL SECTOR OF EGYPT (RED SEA AND SINAI

REGION)

FINAL REPORT

TABLE OF CONTENTS

ACKNOWLEDGEMENTS .............................................................................. ERROR! BOOKMARK NOT DEFINED.

1 EXECUTIVE SUMMARY ............................................................................................................................ 5

2 INTRODUCTION ......................................................................................................................................... 13

3 BACKGROUND CONSIDERATIONS FOR INVESTMENT .................................................... 18

4 MARKET SURVEY ...................................................................................................................................... 25

5 WALK THROUGH AUDITS ................................................................................................................... 30

6 TECHNICAL AND MARKET POTENTIAL ...................................................................................... 60

7 MAIN FINDINGS AND RECOMMENDATIONS.......................................................................... 67

8 ANNEX A: ENERGY PRICES ............................................................................................................... 71

9 ANNEX B: LIST OF RESORTS THAT PARTICIPATE IN THE SURVEY ...................... 72

10 ANNEX C: MARKET SURVEY .............................................................................................................. 74

11 ANNEX D: KPIS PER SQUARED METER ..................................................................................... 83

12 ANNEX E: CONCENTRATED SOLAR POWER ........................................................................... 95

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TABLE OF EXHIBITS

Exhibit 1- Cost per guest night in the different resorts ............................................................................................................... 7 Exhibit 2- List of the energy conservation measures and simple paybacks ................................................................. 7 Exhibit 3- WTAs resume (CHP results not included) ...................................................................................................................... 8 Exhibit 4- CHP resume ......................................................................................................................................................................................... 8 Exhibit 5- Technical market: Number and percentage of hotels per prototype segment ................................... 9 Exhibit 6- Market Barriers and way to overcome ............................................................................................................................. 9 Exhibit 7- Number of projects and associated investment in detail ................................................................................. 10 Exhibit 8- Average number of projects and associated investment ................................................................................. 11 Exhibit 9- Red Sea and Sinai distribution per hotels category ............................................................................................. 14 Exhibit 10- Red Sea and Sinai hotels distribution per room number............................................................................... 14 Exhibit 11- Distribution per category according to the room capacity at the Sinai .............................................. 15 Exhibit 12- 4* segmentation per number of rooms at Sinai .................................................................................................. 15 Exhibit 13- 5* segmentation per number of rooms at Sinai .................................................................................................. 15 Exhibit 14- Distribution per category according to the room capacity at the Red Sea ....................................... 16 Exhibit 15- 4* segmentation per number of rooms at Red Sea .......................................................................................... 16 Exhibit 16- 5* segmentation per number of rooms at Red Sea .......................................................................................... 17 Exhibit 17- Air temperatures (ºC) in Sharm El Sheikh .............................................................................................................. 17 Exhibit 18- Approximate Amount of Egypt’s Energy Subsidies in FY 2009/2010 ................................................... 19 Exhibit 19- Responses per hotel category ........................................................................................................................................... 25 Exhibit 20- Position of the surveyed ........................................................................................................................................................ 25 Exhibit 21- Distribution of answer per guest rooms..................................................................................................................... 26 Exhibit 22- Refurbishment Classification .............................................................................................................................................. 26 Exhibit 23- Opening year of the resort .................................................................................................................................................. 26 Exhibit 24- Energy costs over sales ......................................................................................................................................................... 27 Exhibit 25- Age of the hot water facilities ............................................................................... Error! Bookmark not defined. Exhibit 26- Age of the cooling facilities ..................................................................................... Error! Bookmark not defined. Exhibit 27- Distribution of the fuel use to produce hot water ............................................................................................... 28 Exhibit 28- interest for the application of conservation measures .................................................................................... 28 Exhibit 29- Interest for technological investments ....................................................................................................................... 29 Exhibit 30- Simple payback as a decision factor ............................................................................................................................ 29 Exhibit 31- Perception for Energy Service Companies ............................................................................................................... 29 Exhibit 32- Location of the visited resorts for WTAs .................................................................................................................... 30 Exhibit 33- General data of the visited hotels .................................................................................................................................. 31 Exhibit 34- Room occupancy evolution ................................................................................................................................................ 32 Exhibit 35- Average room occupancy ..................................................................................................................................................... 33 Exhibit 36- Average guest nights per resort ...................................................................................................................................... 33 Exhibit 37- Resume of the consumption and cost baselines for selected resorts ................................................... 35 Exhibit 38- Energy cost (EGP) per resort ............................................................................................................................................. 36 Exhibit 39- Energy and water breakdowns in four representative hotels..................................................................... 37 Exhibit 40- Electrical, diesel and water Key Performance Indicator ................................................................................. 38 Exhibit 41- Cost per guest night in the different resorts .......................................................................................................... 39 Exhibit 42- Cost per guest night in the different resorts .......................................................................................................... 39 Exhibit 43- Areas of Energy Efficiency ................................................................................................................................................... 40 Exhibit 44- List of the energy conservation measures ............................................................................................................... 40 Exhibit 45- Typical monthly electrical consumption of a resort in Sinai and Red Sea (kWh) ........................ 41 Exhibit 46- Coefficient of Performance of the cooling systems ............................................................................................ 42 Exhibit 47- Cost estimation switching air-conditioning .............................................................................................................. 42 Exhibit 48- Savings switching air-condition ....................................................................................................................................... 43 Exhibit 49- Glazing types and low-E glass .......................................................................................................................................... 46 Exhibit 50- Reverse osmosis desalinated water plant ................................................................................................................ 48 Exhibit 51- SWH central system in hotel .............................................................................................................................................. 50 Exhibit 52- Typical figure of hot water demand in a resort at Sinai (diesel consumption, litres) .............. 50 Exhibit 53- Solar collector section ............................................................................................................................................................. 51 Exhibit 54- Cogeneration or trigeneration systems ...................................................................................................................... 55 Exhibit 55- Resume of the cogeneration investments ................................................................................................................ 57 Exhibit 56- CSP-DSW Plant Conceptual Design with added RO modality ..................................................................... 58 Exhibit 57- WTAs resume (CHP results not included) ................................................................................................................. 59 Exhibit 58- CHP resume .................................................................................................................................................................................... 59 Exhibit 59- Prototypes defined according to the main variables that affect energy consumption ............. 61

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Exhibit 60- Technical market: Number and percentage of hotels per prototype segment .............................. 61 Exhibit 61- List of the energy conservation measures ............................................................................................................... 62 Exhibit 62- Market Barriers and way to overcome ........................................................................................................................ 62 Exhibit 63- Number of projects and associated investment -Conservative Scenario .......................................... 65 Exhibit 64- Number of projects and associated investment -Optimistic Scenario ................................................. 65 Exhibit 65 - Number of projects and associated investment in detail ............................................................................. 65 Exhibit 66- Average number of projects and associated investment .............................................................................. 66

Disclaimer Notice “The findings, interpretations and conclusions expressed in this report are entirely those of AF-MERCADOS and should not be attributed in any manner to the EBRD or its affiliated organizations.”

AF-MERCADOS EMI


1 Executive Summary

Tourism is recognized to be one of the largest contributors to Egypt’s economic growth, where most of

the sector’s new jobs and businesses are being created. According to the Central Bank of Egypt, tourism

represents 11.3% of Egypt’s GDP, 36.4% of the total exported services and accounts for 23% of the

country’s foreign currency income. Therefore, the hotel sector represents one of the cornerstones of the

Egyptian economy, particularly since mid 80s – 90s when a large number of large resorts initiated their

activities in the South Sinai and Red Sea areas; these were mainly 5*, 4* and 3* hotels, which receive

European tourism all year through due to the excellent climate, beaches, high quality services and aqua

sports (diving, snorkelling, windsurfing and kite surfing).

According to the Egyptian Hotel Association1 (EHA), there were approximately 965 hotels in Egypt, with

almost 180.000 rooms (equivalent to 342,302 available beds). Of these, the Sinai and Red Sea areas

concentrate the 60% of the hotels in Egypt, representing the 75% of the room capacity (134,761 rooms).

More precisely, 90% of the rooms in these areas are concentrated in 389 hotels (5*, 4* and 3*), which

represent the largest potential for investments in sustainable energy (see chapter 2)

However, the profitability of the Egyptian hotel sector has been affected negatively after the 2011

revolution and the current political instability in Egypt, with a significant decrease in the number of

visitors; this has been affecting the sector income since 2011. At the same time, the lack of investment on

the electrical system in the last years, together with the important growth of the demand side in a

country where energy prices are heavily subsidized, have led the system to continuous cuts in the

summer season. So far, the hotel sector was avoided to be curtailed in the critical peak periods in

summer time (5pm until 11 pm) like large industrial consumers which are being curtailed this summer;

however there is an important uncertainty related to potential curtailments in the future. One of the main

strategies of the government is to reduce in the short-medium term the high level of subsidies in natural

gas, LPG and electricity; these are the main fuels used by the hotel sector in Egypt (see chapter 3).

From an energy point of view, in order to characterize, identify and evaluate opportunities for sustainable

energy investments in the hotel sector, two complementary approaches were used. On the one hand, a

market survey (chapter 3) was successfully completed during April 2013 to all the hotels in the area, with

93 hotels participating on the survey; on the other, twelve walk through audits (chapter 4) in 5*, 4* and 3*

resorts were driven in Sharm el Sheikh, Hurghada, Makadi, Sahl Hasheish and Marsa Alam.

Some of the main findings are summarized in the following subparagraphs:

Architecture and design

Almost 75% of the hotels started operation between 1995 and 2005, and almost 50% of them

have completed a general overhaul or partial renovation

Maximum view of the sea and/or the swimming pools

High exposure of façades to sun radiation, with nearly no attention to type of glazing, shading

and insulation

Multi-storey buildings with maximum four stories high

1 Data extraction from 13/11/2012

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Materials: reinforced concrete for the skeleton and single walls and glazing for the envelope

Several swimming pools heated during winter time

Large gardens and several sport facilities (tennis courts, gyms, etc.)

Facilities

Cooling demand proves to be the largest energy consumption in the resorts, nevertheless, only

28,2% of the hotels have a centralized cooling systems for common areas and/or guest rooms;

and most of them (81%) use split units for the guest rooms where they can freely control the

temperature.

HVAC: public areas are cooled using central air condition with large chillers. Guest rooms can use

either central (mainly 5*) and/or split systems (4* and 3*). All HVAC systems are power operated,

except for a few hotels2 (absorption chillers) that have been connected to the natural gas grid

recently.

Pumping and motors: low presence of variable speed drivers

Swimming pools: all resorts have more than one large unit heated during the winter time (27ª-

30ªC)

Domestic Hot Water (DHW): all the resorts use diesel boilers (5*) or electric heaters (4* and 3*)

and presence of SWH is minimum

Kitchen: they can use a mix of LPG and electricity or 100% electric and they normally run on “all

inclusive” basis

Laundry: they use steam or hot water supplied by fire tube boilers

Guest rooms: high standards (TV, lighting, minibar, hair dryer, etc.)

Indoor lighting: mix of incandescent, halogens and LEDs

Outdoor lighting: mainly metal halides and mercury vapour luminaries

All have emergency generator for cases of electricity cut-off, however consumption is negligible.

Onsite power generation plants at Marsa Alam

Onsite desalination plant: reverse osmosis plants

Waste treatment plant: standard equipment required by Law

Large restaurants, shops, health centres and in few hotels large conference centre

Energy and water

Energy costs over the total operational costs vary between 5% to 15% for more than the 50% of

the hotels in the areas

Electricity is provided through the grid, except in Marsa Alam (onsite generation).

Generally, fresh water is produced onsite due to the lack of a municipal water distribution system.

The fuels used for producing steam for laundries and hot water for guest rooms and swimming

pools (in winter) are diesel and electricity, except in two hotels at Sharm El Sheikh that have been

recently connected to the natural gas grid.

LPG is only used in some kitchens at some hotels.

In Sharm El Sheikh, the natural gas distribution company is expanding the grid in the area and it

is forecasted that in few years time it will connect many hotels in the area.

By law, resorts are required to treat their wastewater and to either reuse or dispose the treated

effluent in an environmentally friendly way.

None or minimum presence of renewable energies (SWH, PV, wind, biogas, etc.)

In terms of energy costs, the distribution per hotel varies from one hotel to another, but in general terms

electricity represents the highest cost (average 59%), followed by water (average 28%) and diesel (13%);

in terms of total cost per guest night (Exhibit 1) the average of the Sinai´s resort is 30 EGP/PAX, 20

EGP/PAX in Marsa Alam and 14 EGP/PAX in North Red Sea for the registered occupancy of the last three

years.

2 H4-5#500@S and H3-5#400@S Resorts have been connected to the Natural Gas Grid in March 2013.

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Exhibit 1- Cost per guest night in the different resorts

The scope of technologies studied in the WTAs and the associated energy conservation measures (ECMs)

cover the following aspects: reduction of the energy and water demand (REM), improvement of the

energy efficiency in the conversion of delivered energy to useful energy (EEM), on site generation (OGM),

renewable generation (RES), fuel switching strategies (FSS), operation and maintenance benefits (O&M).

The identified energy conservation measures are summarized in the following table, which also include

the typical simple payback for the measure in the Red Se hotels.

Exhibit 2- List of the energy conservation measures and simple paybacks

Energy Conservation Measures Classification Simple Payback (years)

Code Executive Description REM EEM OGM RGM FSS O&M min max

ECM-1 Switching from individual splits to centralized cooling systems

x 2 3

ECM-2 Replacement of air cooled chillers to absorption chillers

x x x 3.5 4.5

ECM-3 Waste heat recovery systems x 4 5

ECM-4 Improving the envelope energy performance (windows and walls)

x x 5 10

ECM-5 Building energy management system x x 3 6

ECM-6 Adding pressure exchangers to the desalination plants

x 2 3

ECM-7 More efficiency motors and pumps with variable speed drivers

x x 2.5 4

ECM-8 Replacement of central diesel boilers by SWH

x x 8 9

ECM-9 Replacement of single electrical heaters boilers by SWH

x x 7 8

ECM-10 Minimization of the evaporation and heat losses at the swimming pools

x 1.5 2.5

ECM-11 Water conservation x 1 2

ECM-12 Relamping for indoor and outdoor common areas

x x 1 2

ECM-13 Photovoltaic panels for outdoor lighting x x 1.5 3

ECM-14 Fuel switching to natural gas x x x 3 4

ECM-15 Cogeneration plants x x x 5 7

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For the eleven WTAs, the total investment in sustainable energy (not including CHP) is over 82 million

EGP (8.8 million EUR), with a minimum investment per resort of 3.9 million EGP (0.11 million EUR) up to

13.5 million EGP (1,45 million EUR), being the solar water heaters and the central chillers the main

investment for the majority of the resorts. This investment will increase notoriously in the hotels that are

being connected to the natural gas grid, as can be seen below in Exhibit 3

Exhibit 3- WTAs resume (CHP results not included)

Hotel Estimated

total CAPEX (EGP)

Annual Saving

(EGP/yr)

Energy Cost (EGP)

Energy Savings

(%)

Saving (tCO2/yr)

After-tax

Payback IRR NPV

H1-4#369@S 10,218,403 1,446,796 5,314,583 27 2,107 4.0 30 2,862,519

H2-5#470@S 7,107,423 1,640,347 8,942,038 18 2,879 6.1 19 1,171,445

H3-5#400@S 7,694,964 1,946738 6,536,401 30 2,040 4.8 22 2,953,766

H4-5#500@S 7,913,852 1,650,490 8,239,656 20 1,351 5.5 18 1,275,746

H5-5#318@S 4,831,141 1,134,248 5,213,479 22 1,516 5.3 20 1,194,817

H6-5#364@MA 4,779,158 774,392 3,215,977 24 721 2.8 42 1,632,833

H7-4#140@MA 3,922,88 531,795 1,586,852 34 659 3.4 36 803,102

H8-4#313@NRS 6,323,826 564,855 2,227,921 25 820 3.1 34 1,142,773

H9-5#700@NRS 13,567,560 1,482,180 7,333,767 20 2,527 5.7 21 24,874

H10-5#292@NRS

8,047,202 1,082,924 2,692,504 40 1,848 4.5 25 1,203,403

H11-3#522@NRS

9,539,650 668,424 3,771,046 18 952 3.4 33 1,094,386

Exhibit 4- CHP resume

Hotel Estimated total CAPEX

(EGP) Annual Saving

(EGP/yr) Saving

(tCO2/yr)

After-tax

Payback IRR NPV

H5-5#318@S 7,632,835 1,941,746 1,957 5.0 18.5 11,363,631

H4-5#500@S 19,558,403 3,756,932 2,337 6.0 13.9 965,709

H3-5#400@S 15,525,296 2,980,617 1,852 6.0 13.9 -774,090

In general terms, the saving potential is high and the total CO2 saving potential will be of more than

28,500 ton CO2/year, not including CHP (more than 55,000 ton CO2/year including CHP). In terms of

economical and financial results, while the payback varies from 2,8 years up to 6,2 years, the IRRs varies

from 18% to 42%. Typical CHP IRRs are around 15%.

For the determination of the market potential (section 6), four prototypes of resorts were classified under

the following variables:

Location: in general, Sinai resorts have higher energy consumption per guest night than the Red

Sea area, including Marsa Alam.

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Connection to the electrical grid: Marsa Alam resorts are isolated from the electrical grid,

affecting the electricity prices paid by the resorts.

Connection to the natural gas grid: Actually Sharm el Sheikh and in the future Hurghada area are

or will be connected to the natural gas grid. This will create large investment opportunities in the

connected hotels for the H5-5#318@S, H4-5#500@S and H3-5#400@S resorts.

Category of the resort at the South Sinai area: in general, 5* resorts are characterized for their

luxury and exclusive facilities (guest rooms, restaurants, number of swimming pools, spas, stores,

etc.).

HVAC technology: cooling represents the higher energy demand at the resorts, due to the high

temperatures all throughout the year. In 5* hotels in Sinai, they normally use central chillers for

common areas and guest rooms; however, 4* and 3* normally use split units for the guest rooms.

In the Red Sea area, the majority of the resorts (5*, 4* and 3*) use split units for cooling the guest

rooms.

Steam & hot water production: 5* SINAI´s resorts produced their hot water with central diesel

boilers, while hotels in the Red Sea very often used electrical heaters for the guest rooms.

The technical market is represented in the figure below: 5* at Sinai (R-5@S); 4* and 3* at Sinai (R-43@S);

5*, 4* and 3* at North Red Sea (R-543@NRS); 5*, 4* and 3* at Marsa Alam (R-543@MA).

Exhibit 5- Technical market: Number and percentage of hotels per prototype segment

For the estimations of the market potential and the investment plan, additional to the four prototypes,

two projection scenarios are defined (conservative and optimistic), depending on how the market barriers

are solved in the short-medium term (up to 2015) and long term (up to 2020). The market barriers

identified are resumed in the table below.

Exhibit 6- Market Barriers and way to overcome

Barriers Comments Way to overcome Time to

implement

Lack of Legislative and Regulatory Framework

As seen in chapter 2, actually there are no laws, regulations or effective policies to promote energy efficiency and renewable energy in Egypt. Also, there is no clear and comprehensive strategy and/or program for improving EE & RE. Notwithstanding the creation of the new Energy Efficiency Unit, still there is no dedicated institution that has clear implementation and executive authority for pursuing energy efficiency objectives

Accelerating the adoption of the Bylaws and new directives for energy efficiency and renewable energy.

Medium-Long Term (2-3 year at least)

Financial Constrains Hotels are very much interested in Dialogue with Business Short /

R-5@S21%

R-43@S28%

R-543@NRS39%

R-543@MA12%

R-5@S#52

R-43@S#147

R-543@NRS#146

R-543@MA#44

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reducing energy expenditures (which represent around 6 to 8 per cent of their annual costs or even more), but hotel owners are facing financial constraints, mainly due to reduction in the number of tourists in the last two years resulting from the instability in the Middle East.

Associations, Local Banks, International Donors and IFIs to individuate possible alternative financing tools or mechanisms to introduce EE&RE component into loan products specifically intended for hotels

Medium Term (1 year)

Profitability of EE measures for end users

The conventional energy prices are still heavily subsidized in Egypt. Due to the low prices of electricity, natural gas and diesel, the pay-back period of some EE measures is often beyond the acceptable level for commercial sector end-user.

Energy Efficiency in hotels could be addressed by upstream sufficient sustainable resources. This requires dialogue with the Government, International Institutions and local banks to customize existing and/or newly financing mechanisms.

Medium Term (2-3 years )

High cost of initial investment

Despite some subsidies in SWH, the initial investments for RE and EE measures remain high or very high and profitability is low, which does not allow the development of a spontaneous market for EE measures.

Creation and implementation of National Funds for the promotion of EE and RE.

Medium –Long Term (2 year at least)

Low interest and lack of awareness of end user toward EE and RES technologies, their economic results and financial mechanisms

The penetration rate of EE and RE measures in the hotel sector is very low and almost limited to SWH systems and a few EE technologies like lighting. Effective results of these measures, mainly in terms of achievable savings, are not diffused in Egypt and are not well understood by the potential end-users. This limits a wider diffusion of EE measures and techniques in the hotel sector.

Policy dialogue, requiring cooperation with Government (and International Donors and Institutions to introduce additional regulatory measures on energy efficiency minimum requirements for buildings and/or specific obligation to install EE and/or RE systems in resorts.

Information and educational campaigns through different stakeholders, like governmental institutions, Egyptian Hotel Association, Engineering Associations, Architectures, vendors, etc.

Short-Medium term (1 year at least)

Lack of energy services companies (ESCOS)

Though perception for ESCOS is good (Survey, chapter 3); currently there are no relevant ESCOs working in Egypt that could foster the improvement of the sustainability of the hotels.

Identifying national players that aim to develop the first pilot projects and assisting them with technical and specific know-how in energy services contracts and risk management through international cooperation.

Short-Medium term (1 year at least)

For the conservative and optimistic scenario, we forecast a higher number of projects and investment in

the Sinai area, mainly due to the existing natural gas extension plan in Sharm El Sheikh; the main

difference between both scenarios is the success in the promotion of EE and RE financing mechanism in

both areas (see section 6.5) and if in any major overhauls in a certain hotel, better isolation measures are

financed.

Exhibit 7- Number of projects and associated investment in detail

Short term (up to 2015) Long term (up to 2020)

Estimated number

of

Estimated average

investment

Business Opportunity

(Euros)

Estimated number

of

Estimated average

investment

Business opportunity

(Euros)

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projects (n)

per client (Euros)

projects (n)

per client (Euros)

Conservative Scenario

R-5@S 2 1,375,00 2,750,000 8 1,531,250 12,250,000

R-43@S 3 1,000,00 3,000,000 12 812,500 9,750,000

R-543@NRS

2 750,00 1,500,000 6 1,083,333 6,500,000

R-543@MA 2 400,00 800,000 5 400,000 2,000,000

TOTAL 9 894,444 8,050,000 31 983,871 30,500,000

Optimistic Scenario

R-5@S 3 1,583,333 4,750,000 13 1,519,231 19,750,000

R-43@S 6 875,000 5,250,000 24 937,500 22,500,000

R-543@NRS

2 750,000 1,500,000 13 1,057,692 13,750,000

R-543@MA 4 400,000 1,600,000 9 400,000 3,600,000

Major overhaul

2 300,000 600,000 8 300,000 2,400,000

TOTAL 17 781,667 13,700,000 67 842,885 62,000,000

Average

Credit financing

line 3 1,500,000 3,750,000 11 1,523,810 16,000,000

ESCO 0 na 0 0 na 0

TOTAL 13 836,538 10,875,000 49 943,878 46,250,000

Exhibit 8 resumes both optimistic and conservative scenarios presenting the average number of project

and associated investment in the short and long term for the four prototypes of hotels and potential

major overhauls.

Exhibit 8- Average number of projects and associated investment

Market potential of EE investment projects in Tertiary sector

Est. number of projects

Typical Investment

size

Suitable EBRD

Funding type*

Potential for EBRD

EE measures: Lighting, VF, Boilers, AC equipment, Cooling System (Chillers, refrigeration towers) SWH, Insulation

Short term

Long term

Short term Long term

Up to 2015

Up to 2020

Up to 2015 Up to 2020

(n) (n) (thous. Euros)

(thous. Euros)

(thous. Euros)

R-5@S 3 11 11,512 1 3,750 16,000

R-43@S 5 18 906 1 4,125 16,125

R-543@NRS 2 10 908 1 1,500 10,125

R-543@MA 3 7 400 1 1,200 2,800

Major Overhaul 1 4 300 1 300 1,200

TOTAL 13 49 10,875 46,250

* Typical types of EBRD funding: 1. Credit line facility (up to MEuros 5), 2. Direct lending facility (M5 to 15) 3. Direct lending (over MEuros10) 4. ESCO

According to these investment estimations per hotel and taking into account the estimations for the total

number of hotels (above 3*) in the area of the Red Sea, the total potential market for financing

opportunities in sustainable energy will be close to 400-500 million Euros. If we consider that the 75% of

the rooms available in Egypt are in the Red Sea area, we can estimate that the total potential for Egypt

would be over 600 million Euros.

Finally, the main findings and recommendations (details in section 7) for the development of sustainable

financing at the hotel sector can be summarized in the following statements:

1. ”Perception of a severe increment in the energy prices is a key driver for EE and RE projects”

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2. ”Hotel chains are key players to open the market”

3. ”High saving potential, reasonable paybacks but low penetration of energy efficiency

technologies”

4. ”The expansion of the Natural Gas Grid opens the market for high efficiency natural gas

technologies”

5. ”Renewable energy technologies have a great run but more “local success histories” are needed”

6. ”Potential for large investments in singular projects”

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2 Introduction

2.1 Description of the hotel sector at the Red Sea and Sinai Areas

Tourism is recognized to be one of the largest contributors

to Egypt’s economic growth, where most of the sector’s new

jobs and businesses are being created. According to the

Central Bank of Egypt, tourism represents 11.3% of Egypt’s

GDP, 36.4% of the total exported services and accounts for

23% of the country’s foreign currency income.

In Egypt, tourism has grown rapidly and almost always

constantly over the past 20 years. Recreational tourism

domain has grown rapidly in particular locations such as

Sharm El-Sheikh, Hurghada, Safaga, Taba, Marsa Alam and

others places located on the Red Sea and the Sinai areas.

European countries (Russia, United Kingdom, Germany, Italy

and France) mainly are the main source of tourism in Egypt,

constituting about 74.2% of the total amount of tourists,

followed by the Middle East countries with a 13.6%3. However, since the economical crisis started and

particularly after the “Egyptian revolution” in 2011, the number of visitors has decreased notably.

Nevertheless, the Egyptian hotel Association (EHA) expects to recover 2010’s occupancy rates in the

medium term.

In a survey4 made to determine the top motivations that move foreigners to travel to South Sinai, the

results were: climate (82%), beaches (44%), snorkelling and water sports (with 33%), good value for

money (27%) and travel time (23%). Interestingly, however, when asked about the most enjoying aspects

of their holidays, tourists ranked coral reefs in the first place (73%), before climate (58%), beauty of

landscape (35%), beaches (31%) and accommodation, services and food (26%).

According to EHA, there were approximately 965 hotels in Egypt, with almost 180.000 rooms (equivalent

to 342,302 available beds). Of these, Sinai and Red Sea areas concentrate the 60% of the hotels in Egypt,

3 Ministry of Tourism 2009

4 the Support for Environmental Assessment and Management of Egypt,2004

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representing the 75% of the room capacity (134,761 rooms).

Exhibit 9- Red Sea and Sinai distribution per hotels category

South Sinai Red Sea Suez North Sinai Total

5 stars 52 38 3 2 95

4 stars 78 77 2 0 157

3 stars 69 78 14 1 162

2 stars 43 36 4 3 86

1 stars 19 21 1 0 41

Unclassified 22 21 2 0 45

Total 283 271 26 6 586

Source: Egyptian Hotel Association (EHA)

For this study, we will focus on South Sinai (48% of the rooms available) and Red Sea (52% of the rooms)

areas. In terms of the category of the hotel, we will study the 5* (32% of the rooms available in both

areas), 4* (36% of the rooms) and 3* (19% of the rooms), as shown in the table below.

Exhibit 10- Red Sea and Sinai hotels distribution per room number

South Sinai Red Sea Total

# % # % # %

5 stars 24,917 19% 17,685 13% 42,602 32%

4 stars 21,502 16% 26,664 20% 48,166 36%

3 stars 9,220 7% 15,480 12% 24,700 19%

2 stars 2,856 2% 3,274 2% 6,130 5%

1 stars 856 1% 1,146 1% 2,002 2%

Unclassified 3,445 3% 4,956 4% 8,401 6%

Total 62,796 48% 69,205 52% 132,001 100%

Source: EHA

2.1.1 Sinai Hotel Segmentation5

Lying at the southern flank of the Peninsula where the both Aqaba and Suez gulfs meet with the Red Sea,

Sharm El-Sheikh stands as the biggest and most important city of Sinai, considered as the most famous

seaside resort in the area. The 283 hotels that can be found in Sinai are concentrated mainly at Sharm El

Sheikh (194), Dahab (30), Taba (23) and Nuweiba (17), with a total capacity of 62,796 rooms.

5 For the analysis of this report, the following resort´s classification by number of rooms has been used:

• Small (S) size: lower than #200 rooms

• Medium (M) size: between #200 and #300 rooms

• Large (L) size: between #300 and #450 rooms

• Extra large (XL) size: between #450 and #700 rooms

• Extra large (XXL) size: above #700 rooms

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Exhibit 11- Distribution per category according to the room capacity at the Sinai

Source: EHA

The segmentation per number of rooms in 5* hotels, represented in Exhibit 13, shows that the size of the

hotels in this area is concentrated in L (#300 to #450) and XL (#450 to #700), with an average of 473

rooms per hotel; by contrast, 4* hotels they are concentrated in S (<#200) and medium size (#201 to

#300), with an average of 265 rooms per hotel. The average for 3* hotels is 163 rooms.

Exhibit 12- 4* segmentation per number of rooms at Sinai

Exhibit 13- 5* segmentation per number of rooms at Sinai

Source: EHA

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2.1.2 Red Sea Hotel Segmentation

The 271 hotels at the Red Sea area are concentrated mainly at Hurghada (160), Ainsokha (22), Safaga

(21), Elgouna (13) and Marsa Alam (48), with a media of 267 rooms per hotel. According to EHA’s

database, the 5* and 4* hotels represent the 42% of the total hotels in the area, concentrating more than

the 75% of the rooms.

Exhibit 14- Distribution per category according to the room capacity at the Red Sea

The segmentation per number of rooms in 5* hotels, represented in shows that the size of the hotels in

this area is concentrated in L (#300 to #450) and XL (#450 to #700), with an average of 450 rooms per

hotel, while in 4* hotels they are concentrated in S (<#200) and medium size (#201 to #300), with an

average of 343 rooms per hotel. The average for 3* hotels is 177 rooms.

Exhibit 15- 4* segmentation per number of rooms at Red Sea

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Exhibit 16- 5* segmentation per number of rooms at Red Sea

Source: EHA

2.1.3 Climate conditions

Both areas have a very similar arid desert climate, with only two main seasons, both of which are dry.

Exhibit 17 shows the average air and water temperatures throughout the year. The winter months go

from November to March, during which the day temperature is warm but during the night can drop to

about 12°C and lower in the desert. The annual rainfall is zero; during the winter months, it can rain but

just for a few seconds, and every few years a storm takes place, producing floods and power cuts. The

summer weather is very hot and dry with low humidity, making high temperatures a lot more bearable.

The temperature during the day can be about 40ºC and decrease during the night time to about 30ºC.

Exhibit 17- Air temperatures (ºC) in Sharm El Sheikh

Source: Norwegian Meteorological Institute

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3 Background considerations for investment

3.1 Energy in Egypt

Egypt’s energy mix is dominated by oil and gas; this is expected to continue so until 2030, accounting for

95% of its primary energy demand. Energy demand in Egypt is projected to grow at an average annual

growth rate of 2.6%6.

One of the critical aspects of the energy sector in Egypt is the high level of subsidies in energy prices,

representing a substantial drain on Egypt’s budget (i.e. for the electricity at the commercial –hotel- sector

subsidies are over 50% for electricity, 75% in natural gas and over 90% in LPG). The official statistics7

show that petroleum subsidies increased from 40 billion EGP (4.3 billion EUR) in 2005/2006 fiscal year (FY)

to 68 billion EGP (7.315 billion EUR) in the 2009/2010 FY. If energy subsidies are calculated on the basis of

full economic cost, the resulting number will reach 140 billion EGP (15.06 billion EUR) – equivalent to 11.9

% of GDP. As shown in Exhibit 18, more than half of the energy subsidies are attributable to petroleum

products, while one-third is accounted for by electricity and about 15% by natural gas. Energy subsidies

amount to about 73% of all subsidies and approximately 21% of the country’s budget.

In addition to the high budgetary cost associated with energy subsidies, artificially low energy prices

result in an excessive energy consumption that has resulted in Egypt’s switch from oil exporting to an oil

importing country, while also limiting the country’s ability to export natural gas. In 2009, Egypt produces

88,186 thousand tonnes of oil equivalent8 (ktoe), mainly crude oil (33,920 ktoe) and natural gas (51,479

ktoe), at the same time, Egypt imports 10,456 ktoe and exports 25,452 ktoe, for a net primary demand of

72,015 ktoe (excluding international marine and aviation bunkers).

Meanwhile, an increase in Egypt’s CO2 emissions is projected at an average annual rate of 2.6%, from 122

Mt in 2003 to 151 Mt in 2010 and 242 Mt in 20309. The main emitter of green house gases (GHG) in

Egypt is fuel combustion accounting for 22% in the energy sector, 21% in the industry sector and 18% in

the transport sector10

. The energy sector is expected to remain the major source for GHG emissions in the

future and the one to increase its share with the highest growth rate. This presents another compelling

reason to monitor and reduce energy consumption in hotels and resorts.

6 IEA,. World Energy Outlook : Middle East and North Africa Insights. OECD/IEA, Paris,

7: ESMAP (2009); World Bank (2010a); World Bank (2010b); IMF (2011); Sherif and Elsobki (2010); Abouleinein et. al (2009), Khattab

(2007); Razavi (2009) 8 IEA, http://www.iea.org/stats/balancetable.asp?COUNTRY_CODE=EG

9 IEA,. World Energy Outlook : Middle East and North Africa Insights. OECD/IEA, Paris,

10 Capacity Development for the Clean Develop- ment Mechanism (CD4CDM), Ministry of Trade & Industry (MTI), Ministry of State

for Environmental Affairs (MSEA)

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Exhibit 18- Approximate Amount of Egypt’s Energy Subsidies in FY 2009/2010

Source: African Development Bank

3.2 Energy and water infrastructures

Energy activities in Egypt are managed by

two Ministries: the Ministry of Petroleum

(MOP) and the Ministry of Electricity and

Energy (MOEE). The Supreme Council for

Energy,, represented by the Prime

Minister’s Cabinet and reporting to the

president, is the main body responsible for

setting energy strategies and pricing the

petroleum products and electrical energy

for different sectors in the local market.

Moreover, the water supply for domestic,

industrial, commercial, utilities, etc. is

responsibility of the Holding Company for

Drinking Water and Sanitation (HCDWS).

The electrical power supply through the Egyptian unified power network covers Sinai and some districts

in the Red Sea area. For instance, Hurghada and Safaga are supplied by electricity via the Egyptian unified

power network and the southern District in Red Sea is totally dependent on self/distributed generation

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firing diesel. This distributed power generation is responsibility of individuals or group of customers

willing to get their own power supply.

The Egyptian Natural Gas Company (GASCO) is the agent responsible for the expansion of the

transmission grid in Egypt. Eight natural gas distribution companies operate in certain concession areas

in Egypt that are connected to the national gas pipeline. Actually, the gas network covers the Delta area

and Upper Egypt, and it is planned to connect11

Sharm El Sheikh (connected) and Hurghada at the Sinai

and Red Sea respectively. The gas supply for other districts/cities different than Hurghada or Sharm El

Sheikh is not foreseen in the short-term plan (5-year plan). For the hotel sector a more detailed analysis is

performed in chapter 3 and 4 of this document.

3.3 Opportunities for energy efficiency and renewable in Egypt

3.3.1 Current Energy Efficiency and Renewable Energy Regulation

So far in Egypt, there is no law, regulation or effective policy to promote energy efficiency and renewable

energy. Also, there is no clear and comprehensive strategy and/or program for improving EE & RE.

Though the new Energy Efficiency Unit has been created, there is still no dedicated institution with a clear

implementation and executive authority for pursuing energy efficiency objectives.

The government is preparing the ground for developing the energy sector reform further. The new

Electricity Law has been prepared and sent to the parliament, which introduces a number of changes

toward strengthening the sector’s commercial orientation and its opening to private investment and

competition. It also addresses the promotion of renewable energy and energy efficiency.

The law gives the authority for tariff regulation to the electricity regulatory agency; it also grants more

independence to the Egyptian Electricity Transmission Company (EETC), transforming it to an

independent system operator with open access for bilateral trading between generation and consumers.

Finally, it also promotes the introduction of a competitive end-user market. The draft law is designed to

gradually reduce the investment burden on the state by building up a competitive market and

encouraging private investment. It provides for a gradual elimination of the single buyer market, by

allowing third-party access to the infrastructure owned by the Ministry of Electricity and unbundling

ownership of the distribution system. While the electricity transmission company will continue to be

state-owned, the law provides a legal framework conducive to private sector investment in generation

and distribution.

Subject to the articles of the new electricity law, the investment in EE and RE technologies from the

generation’s point of view is encouraged. In spite of that, the setup for a feed in tariff for power

generation using renewable energies is in progress in order to meet the investment requirements for the

demand on energy in Egypt. The high potential areas for wind farms and concentrating solar power

technologies are determined within the country’s national energy framework, and opens the session for

the private sector to bid for the renewable projects in the Egyptian generation sector. Moreover, an

obligation is set by the new law by which any surplus power from cogeneration distributed systems will

be fed to the utility grid at feed in tariff.

3.3.2 Opportunities for Energy Efficiency and Renewable Energy

In the last years, many programs and projects relevant to the energy efficiency and renewable energy

technologies had been executed in terms of funded projects, as demonstration for tourism sector. The

main objectives concern the following points:

Increase awareness

11

The connection policy is to make the end user to pay share against the distribution network costs in his area, investment for

internal network inside the end user premises as well as the pressure reducing station to demonstrate the required pressure for end

user equipment

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Capacity building

Establish database and benchmarking

Study the barriers and the instrumental tools of EE and RE

Creation for policies and restructuring of operational bodies

Providing technical assistance and grants for EE and RE technologies

A resume of such projects or programs will be presented in the following sub-sections.

3.3.2.1 EGYSOL

In March 2009, Egysol began in the cooperation between United Nation Environment Programme

(UNEP), Italian Ministry for Environment Land and Sea (IMELS), Egyptian New and Renewable Authority

(NREA). The total budget available is of USD 500,000 (estimated roughly EGP 2.8 million); the project is

targeting hotels and resorts both existing and under construction, in the Red Sea and South Sinai

governorates.

EGYSOL facility is based on a public-private partnership established with the aim of replacing

conventional energy (electricity, LPG, natural gas) by solar energy produced through solar water heating

systems (SWHSs) into the Egyptian hotel sector. EGYSOL has been designed to build a sustainable long-

term framework for the solar water heaters market in Egypt.

An end-user financial support mechanism has been designed to stimulate the use of SWHs in the hotel

sector. The support facility has two major components:

A capital cost subsidy of 25% to SWH

installations (up to 250 m² for each hotel), to

be granted to the hotel.

A decreasing maintenance cost subsidy over

a four-year term (4 USD/m2/yr) for the

maintenance cost component for the first

two years of operation (after the year of

warrantee), and (3 USD/m2/yr) for the

remaining two years, to be granted to the

hotel in order to assure the long-term

quality functionality of the installed systems.

Each SWHSs supplier is allowed to install up to 1,000 m² of SWHs, while each hotel is allowed to have up

to 250 m² of SWHs.

Also, EGYSOL organized training courses to improve the technical knowledge of SWHS suppliers,

maintenance & operation technical staff. EGYSOL successfully installed SWHs to more than 23 hotels; the

program will be closed by 2014.

3.3.2.2 Green Star Hotel Initiative

The Green Star Hotel Initiative was jointly developed within the framework of the development

programme; the Deutsche Gesellschaft für internationale Zusammenarbeit (GIZ) implements on behalf of

the German Federal Ministry for Economic Cooperation and Development (BMZ); between Egyptian and

German tourism key players: Orascom Hotels & Development; the Travco Group, TUI AG, the Deutsche

Gesellschaft für Internationale Zusammenarbeit (GIZ) and AGEG Consultants. They all joined forces to

establish the Green Star Hotel Initiative (GSHI) in 2007, with the aim of improving the ecological

performance and competitiveness of Egypt’s hotel industry. The initiative is supported and patronized by

the Ministry of Tourism and has been linked and supported by the leading international organizations in

tourism from the very beginning.

The Green Star Hotel Initiative (GSHI) aims to have a profound impact on further development of the

main tourism destinations in Egypt. GSHI is doing this by encouraging and motivating the hotel sector to

become active and jointly move towards the conservation and protection of natural resources by

implementing the Green Star Hotel System into their hotel operations, training their staff and involving

their guests accordingly.

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The Green Star Hotel rating system is based on a certification system where “Green Stars” are awarded

according to the level of environmental performance of the hotel. Achieving a Green Star Hotel

certification is not easy. Besides passing the Green Star Hotel capacity building programme, the hotel

needs to accomplish all 100 mandatory criteria to a 100%. Further environmental and social actions and

innovative environmental practices are additionally credited. This will be verified in an independent audit

by an audit commission. If the mandatory criteria are all fulfilled and depending on how intensive the

commitment for sustainability is, the hotel can obtain 3, 4 or 5 Green Stars.

Currently, 51 hotels across Egypt are actively participating in the Green, Star Hotel Initiative in five pilot

destinations: El Gouna, Taba Heights Madinat Coraya, Madinat Makadi, and most recently, Sharm

ElSheikh. Out of these hotels, 34 are already Green Star Hotel Certified, while another 15 are rapidly

approaching certification.

3.3.2.3 Egyptian German Joint Committee on RE, EE and Environmental Protection (JCEE)

The Governments of Egypt and Germany have expanded their cooperation and agreed in 2007 to

establish an Egyptian-German High Level Joint Committee for cooperation on renewable energy, energy

efficiency and environmental protection. The overall objective of this Joint Committee is to help promote

an environmentally sustainable economic development, based on the contribution of securing energy

supplies, improving living conditions and preserving the natural environment.

In August 2011, the JCEE, with cooperation of GIZ and the Egyptian Supreme Council of Energy Initiative

,are implementing an innovative mechanism called Solar Water Heater SWH for the promotion of solar

thermal technology in Egypt’s tourism sector.

The project aims to replace conventional energy (LPG, electricity, natural gas) by solar energy to get hot

water, which will provide a solution for reducing greenhouse gas emissions and climate change

improvement.

The idea that lies behind this initiative is to overcome the obstacles and barriers facing the SWH that are

institutional, political, economical, financial, funding, technical, cultural, as well as those related to the

market. Creating a new module for project implementation as a pilot project, attractive, feasible,

replicable based on the proposed incentives, which encourage the investors to use the SWH.

3.3.2.4 Solar Energy Development Association (SEDA)

SEDA is an Egyptian NGO and non-profit association developed in coordination with the GIZ PSDP,

founded with the mission of raising the community’s awareness about solar energy and promoting the

utilization of its huge untapped potential. SEDA is working with government institutions in order to

develop the application of solar energy to take the place it deserves in Egypt’s energy system.

They are acting as a “Platform” representing ALL Solar Industry stakeholders under ONE ROOF (traders,

academics, government, customers, manufacturers, NGO’s, development agencies, international energy

associations, etc.)

In 2012, the SEDA, with cooperation of the Ministry of Tourism, Egyptian Hotels Association (EHA) &

Tourism Development Authority (TDA), implemented a National Program for promoting Solar Water

Heaters in the Hospitality Industry as part of Egypt’s Green Tourism Initiative.

The main objectives of the program are:

To articulate the vision of the tourism sector with regard to increasing its green goals to be

aligned with the global and national concepts of sustainable development, as well as to establish

the foundation to gradually increase the sector’s green activities with an eye on regional

competitiveness for the future of Egyptian tourism.

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To identify, engage in, and promote specific activities and/or programs that facilitate end users

(hotels, resorts, tour operators, etc.) transition into the Green economy, utilizing the units’

available functions and resources.

To enhance the roll of SME’s to invest in green industry, attracting international investment and

creating new jobs.

3.4 Carbon market and constraints in Egypt

3.4.1 Background

The Egyptian government signed the Kyoto Protocol on March 15, 1999 and ratified it on January 12,

2005. As a signatory of the United Nations Framework Convention on Climate Change (UNFCCC), Egypt

was and is still obliged to incorporate the actions of the UNFCCC within the actions of the National

Environmental Action Plan (NEAP). Also, due to the high exposure of Egypt to climate change, the

country needed to address these issues seriously and sought the support of the international community

to mitigate the impacts of it.

For instance, the Clean Development Mechanism (CDM) applies in Egypt, which has seen a significant

growth over the past years (see next Section for details). The CDM institutional structure in Egypt can be

grouped according to three distinctive functions: (i) policy formulation & regulation, (ii) operational, and

(iii) promotional. The responsibility for climate change policy formulation and regulation functions are

under two inter-ministerial committees: the National Committee for Climate Change and Egypt’s CDM

Council (EC-CDM).

3.4.2 Barriers to expansion of CDM market in Egypt

Egypt has a large potential for CDM projects development; however, its progress is considered very slow

compared to other developing countries due to a number of barriers such as:

Limited CDM Awareness;

Small Scale Scattered Projects;

Insufficient Technical Capacity at the Local Level;

Institutional and Legislative Barriers;

Lack of sufficient resources for DNA operation;

High transaction cost and lengthiness of the CDM cycle;

Lack of underlying finance for CDM projects.

3.4.3 Completed & Ongoing Projects in Carbon Trading

As of May 2013, the Egyptian DNA has issued Letters of No Objection for 105 CDM projects. However,

only 15 projects, in addition to 3 programs of activities (PoAs), were registered under the UNFCCC. Also,

16 projects and 11 PoA are either on on-going validation or have requested registration. Other projects

in the portfolio are facing various barriers that hinder the progress of CDM cycle.

The Egyptian portfolio includes projects in the following sectors: 14 renewable energy, 2 afforestation, 2

Agriculture, 10 waste, 3 transport, 44 Fuel switching, 21 energy efficiency and 9 industry.

Once implemented, these projects are expected to achieve annual Greenhouse Gases (GHG) emission

reductions of approximately 4.7 million tCO2e.

3.4.4 CO2 conversion factors in Egypt

The conversion factors for CO2 emissions are mainly dependent on the factors stated by the

Intergovernmental Panel on Climate Change (IPCC – 2006). The values of IPCC are:

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Fuel Type ton CO2 per TJ ton CO2 per TOE TOE per ton

Fuel

ton CO2 per

ton Fuel

Natural Gas 56.1 2.34879 1.112 2.61139

LPG 63.1 2.64187 1.126 2.97448

Kerosene 71.9 3.01031 1.086 3.26920

Diesel 74.4 3.11498 1.066 3.32057

Concerning the above mentioned values, the power generation sector CO2 conversion factor was

calculated12

considering the fuel mix utilized in the power generation sector of Egypt. The end user of

electricity will have an emission factor of 0.647 kg CO2 per kWh consumed, where the emission factor at

generation side is 0.558 kg CO2 per kWh generated. The difference between the two factors is related

to the transmission losses from generation to end user.

12

”The Identification of CDM Projects in the Industrial Sector of Egypt – Energy Efficiency Based Projects” – Study by

Dr. Khaled Elfarra to CDM Component-CCRMP – EEAA, Egypt, September 2010.

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4 Market Survey

4.1 Introduction

During the month of April, an online survey was conducted through the database given by the EHA from

a range of 588 hotels at the Red Sea and Sinai areas; ninety-three hotels answered the questionnaire

(16.5%), most of them 5 star (51.5%) and 4 star (41.4%) as shown in the exhibit below, showing the high

interest of the hotels in this program.

Exhibit 19- Responses per hotel category

Exhibit 20- Position of the surveyed

The respondents include several hotels of relevant hotels international and national chains (80%) like

Marriott, Intercontinental, Sheraton, Travco and Mövenpeick. The complete list of participants can be

found in Annex B. The positions of the persons who answered the survey are represented in the figure

above. In terms of the size of the hotel, the survey is representative for small-medium to extra-large

hotels as detailed below.

Fivestar53%

Fourstar42%

Threestar5%

Owner17%

Generalmanager11%

Maintenancemanager12%

Others60%

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Exhibit 21- Distribution of answer per guest rooms

In the survey, information about the following topics was required:

1. Age of the hotels and last refurbishment practice.

2. Commitment with the environment

3. Energy control and economics

4. Fuels used and purpose

5. Existing technology and their willingness to implement energy efficiency and renewable energy

projects

6. Market barriers for the promotion of sustainable energy

7. Preference for financing mechanism

8. Perception about the Energy Service Companies

4.2 Main results and findings

Almost 75% of the hotels started operation between 1995 and 2005 and almost 50% of them

have completed a general overhaul or partial renovation as shown below.

Exhibit 23- Opening year of the resort

Resorts operate on a regular basis of 365 days per year.

85% of the respondents consider “important that the hotel is committed with the environment”,

whilst 85% declare that they periodically control the energy and water consumption.

90% of the surveyors know the ratio of energy and water costs over the hotels sales revenue, and

more than 50% of the respondents say that energy costs are higher than 5% over the total cost

of the hotel (40% between 5% to 9% of the energy cost over sales ratio and 10% between 10% to

15% of the energy cost over sales), as shown in the figure below..

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

<100rooms 101-300rooms

301-500rooms

>500rooms NoResponses

2.00%

30.30%35.30%

30.30%

2.00%

2%

12%

36%38%

10%

1%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Before1990 1991-1995 1996-2000 2001-2005 2006-2010 A er2011

GeneralOverhaul26%

Bedrooms&Restaurants

38%

CoolingSystem6%

HotWaterSystem3%

Other5%

NoResponses

22%

Exhibit 22- Refurbishment Classification

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Exhibit 24- Energy costs over sales

On the other hand, 50% of respondents did not know whether there was an increase in fuel

prices or not in the last years

According to the answer received, the cooling facilities are old. The resort´s percentage with

an average age higher than 10 years is close to 65%. These units should be replaced in the

short and medium term for new and more efficient equipment, as the cooling technology has

improved its performance in the last ten years (see figure below).

The electricity is used for cooling in most of the resorts; however, we found a few hotels that

begin to use natural gas absorption chillers as they have connected to the natural grid recently.

Only 28.2% of the hotels have a centralized cooling systems for common areas and/or guest

rooms; and most of them (81%) use split units for the guest rooms where they can freely control

the temperature.

Exhibit 25- Age of the cooling facilities

Exhibit 26- Age of the hot water facilities

40.40% 39.30%

10.10% 10.10%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

0to4% 5to9% 10to15% NoResponses

%ofresotrsineacgroup

Ra oofenergycostoversales

37.30%

53.50%

9.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

0-10years 11-20years >20years

41.40%

52.50%

6.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

0-10years 10-20years >20years

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At the same time, the age of the hot water facilities is also old as in the cooling systems (see

figure above).

Diesel (44%) and electricity (38%) are the main fuels used to produce steam and hot water.

Only 4% of the resorts use solar water heaters13

.

Exhibit 27- Distribution of the fuel use to produce hot water

Generally, water is produced locally at the resorts (63%) through desalination plants or by

local water distribution companies that supply to a group of resorts.

Aerators are installed in 77.7% of the hotels in a similar proportion for 4 and 5 * hotels.

According to the results, 80% of the resorts have implemented some type of energy conservation

measure in the last three years: lighting (93.5%), SWH (39.7%)

14, high efficiency boilers (31.1%) or

high efficiency chillers (20.4%).

Nevertheless, when we asked them about “which should be the two majors conservation

measures for reducing the energy and water cost” we found that HVAC was one of the less

preferred, as shown below.

Exhibit 28- interest for the application of conservation measures

Furthermore, asking about the technologies that they would be interested in implementing, the

results were solar water heaters for hot water production (91%) and efficiency lighting (80%). It is

13

We understand that the main reason for this low penetration of SWH is due to the facto f high subsides in the energy that reduce

the profitability of SWH compared to Diesel or electrical boilers. 14

This percentage is somehow contradictory with the percentage of respondents (4%) that declare that they use SWH for hot water

production. After our site visits, we believe that 39.7% is not realistic.

Electricity38%

NaturalGas11%

Diesel45%

SolarEnergy4%

LPG0%

Other2%

0% 10%20%30%40%50% 60% 70% 80%

HVAC

Ligh ng

Kitchen

Hotwater

Spa/Swimmingpool

Laundry

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remarkable that cogeneration has reached 14% when just recently some areas are being

connected to the natural gas grid.

Exhibit 29- Interest for technological investments

Challenges and market barriers to Sustainable Energy Investments in the hotel sector:

In terms of identifying market barriers for the promotion of sustainable energy, the lack of

financing (74%) is considered as the main barrier to energy efficiency, far from the second

barrier, lack of information, with only a 10%.

Remarkably, the lack of profitability only averages 3%; when we questioned them about the

expected simple payback for investment in energy efficiency projects, it seems not to be a key

decision factor for an important percentage of the respondents (see figure below).

Exhibit 30- Simple payback as a decision factor

Under a financing perspective, credit line is the financing mechanism preferred for EE

investments.

Finally, their perception for ESCOs is good as long as they can guarantee their results and lower

energy costs.

Exhibit 31- Perception for Energy Service Companies

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%

Solarwaterheaters

Photovoltaicpanels

Geothermal

Cogenera on

Ligh ng

None

0% 5% 10% 15% 20% 25% 30%35%

Lessthan2years

Between2to4years

Between4to6years

Over6years

0.00%20.00%40.00%60.00% 80.00%100.00%

Never

Onlyiftheyguaranteeresults

Other

NoResponses

0%10%20%30%40%50%60% 70% 80%

Yes

No

Idon'tunderstandthesystem

Ifcheaper,Iwillconsiderit

NoResponses

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5 Walk Through Audits

5.1 Introduction

During the last week of April, two teams (two experts each) visited Sinai and Red Sea areas in order to

conduct twelve walk through audits15 (WTAs) in different resorts as shown in the map below.

Exhibit 32- Location of the visited resorts for WTAs

At the Sinai area, six hotels16

- five resorts17

of 5* and one resort of 4* - were visited and the consultants

interviewed general managers and/or the engineering managers, followed with a site visit of their

installations: cooling facilities, boilers rooms, desalination plants, waste water treatment plants, water

distribution system, guest rooms, kitchen, laundry and commons areas. The visits we performed in

different locations of Sharm El Sheikh. At the same time, another team visited the Red Sea area

performing six WTAs - four in 5* hotels, one in a 4* hotel and one in a 3* hotel - placed in Hurghada,

Makadi, Sahl Hasheish and Marsa Alam as shown in the figure above.

A resume with the general data is detailed in the following table.

15 Track records of monthly occupancy, guest nights and energy and water consumption during the last three years were required. 16

The higher percentage of 5* hotels is due to the fact that they were more interested in the project and they were more proactive

to confirm the site visits. At the same time, we believe that 5* represent the larger opportunity for investments in sustainable energy

in the areas as it was confirmed during the site visits 17

Hyatt was in process for renovation during 2011 and 2012 and data record for this period

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Exhibit 33- General data of the visited hotels

YearProperty

Regime

Service

RegimeWater

Name Location * ad.Owned or

rented

All

inclusivem2 Rooms

Swimming

pools (m3)Spa Sports Golf

Conference

CenterOthers

Electrical

Grid

Gas

GridDiesel Other SWH PV

Desalination

Plant

H0-5#410@S SHARM 5 lux. 2000 OWNED NO 45.000 410 YES YES YES YES 200 pax - YES YES YES LGP NO NO YES

H1-4#369@S SHARM 4 - 2005 OWNED YES N.A. 369 YES YES YES NO NOAquapark

in 2013YES NO YES - NO NO YES

H2-5#470@S SHARM 5 lux. 1997 OWNED YES N.A. 470 8.582 YES YES NO NO - YES NO YES LPG NO NO NO

H3-5#400@S SHARM 5 - 2001 OWNED YES 60.000 400 3.180 YES YES NO 1000 paxComercia

l StreetYES YES YES LPG NO NO YES

H4-5#500@S SHARM 5 lux. 2000 OWNED NO 60.000 500 YES YES YES NO sharedComercia

l StreetYES YES YES LGP NO NO YES

H5-5#318@S SHARM 5 lux. 2006 OWNED YES 200.000 318 5.000 YES YES NO 3500 pax - YES NO YES LPG NO NO NO

H6-5#364@MA MARSA ALAM 5 - 2001 OWNED YES N.A. 364 YES YES YES NO YES - NO NO YES - NO NO YES

H7-4#140@MA MARSA ALAM 4 - N.A. OWNED YES N.A. 140 YES YES YES NO NO - NO NO YES - NO NO YES

H8-4#313@NRS MAKADI 5 - 1998 OWNED YES 74.000 313 YES YES YES NO NO - NO NO NO - NO NO YES

H9-5#700@NRS MAKADI 5 lux. 2005 OWNED YES 200.000 700 YES YES YES NO NO - YES NO YES - NO NO YES

H10-5#292@NRSSAHL

HASHEISH5 - 2008 OWNED NO 62.000 292 YES YES YES NO YES - YES NO YES LGP NO NO YES

H11-3#522@NRS HURGHADA 3 - 1984 OWNED YES 66.000 522 YES YES YES NO NO - YES NO YES - NO NO YES

Hotel

General Characteristics Energy Characteristics

Category Size Other facilities Energy Sources Renewable

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5.2 Room occupancy and guest-night per resort

During our visits, we required track records of monthly occupancy, guest nights and energy and water

consumption during the last three years.

The occupancy of all resorts is determined by the guest-to-room ratio and the room occupancy:

The guest-to-room ratio shows the average number of guests occupying one sold room. It is

defined as the ratio of guest nights (GN o PAX) or bed-nights to the room-nights occupied. In

the visited hotels, this parameter varies between (1.85 and 2.20) according to the data or

manager explanations.

The room occupancy is defined as the number of room-nights occupied divided by the number

of room-nights available, multiplied (in percentage).

Exhibit 34- Room occupancy evolution 18

In general, as shown in the figure above, the “2011 revolution” affected negatively the occupancy rates,

and actually the highest occupancy rates took place in 2010. In any case, 2012 was better than 2011, but

still far from the results reached in 2010. However, some hotel chains like Coral Group and Travco Group,

were able to maintain high occupancy rates after the “revolution”. The average room occupancy for the

hotels is shown in the figure below.

18

For the analysis of this project, it was required three years data in monthly basis, however only in a few cases the information was

100% available or representative (partial or total refurbishment).

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Exhibit 35- Average room occupancy19

According to the guest-to-room ratios, the number of guest nights per hotel is resumed in the following

figure.

Exhibit 36- Average guest nights per resort

The average guest nights per resort is the parameter used to benchmark the hotels (rather than squared

meter or any other parameter) that define key performances indicators used for the analysis at the hotel

sectors, like total energy and water cost per guest night (EGP/PAX), the electrical consumption per guest

night (kWh/PAX), diesel consumption per guest night (litres/PAX), water consumed per guest night

(m3/PAX) and CO2 emissions per guest night (CO2 kg/PAX). All these parameters are presented in

section 4.5.

19

The average room occupancy is the average of the occupancy for the last three years. In case of partial information, the average

is calculated with the collected data.

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5.3 Main characteristics of the audited resorts

5.3.1 Architecture and design

The main characteristics are:

Maximum view of the sea and/or the swimming pools

High exposure of façades to sun radiation with nearly no attention to the type of glazing,

shading and insulation

Multi-storey buildings with maximum four stories high

Materials: reinforced concrete for the skeleton and single walls and glazing for the envelope

Several swimming pools heated during winter time

Large gardens and several sport facilities (tennis courts, gyms, etc.)

5.3.2 Facilities

The main characteristics found are:

HVAC: public areas are cooled using central air condition with large chillers. Guest rooms can use

either central (mainly 5*) and/or split systems (4* and 3*). All HVAC systems are power operated,

except two hotels20

(absorption chillers)

Pumping and motors: low presence of variable speed drivers

Swimming pools: all resorts have more than one large unit heated during the winter time (27ª-

30ªC)

Domestic Hot Water (DHW): all the resorts use diesel boilers (5*) or electric heaters (4* and 3*)

and presence of SWH is minimum

Kitchen: they can use a mix of LPG or electricity or 100% electric and they normally run on “all

inclusive” basis.

Laundry: they use steam or hot water supplied by fire tube boilers.

Guest rooms: high standards (TV, lighting, minibar, hair dryer, etc.)

Indoor lighting: mix of incandescent, halogens and LEDs

Outdoor lighting: mainly metal halides and mercury vapour luminaries

All have emergency generator for cases of electricity cut-off, however consumption is negligible.

Onsite power generation plants at Marsa Alam

Onsite desalination plant: reverse osmosis plants

Waste treatment plant: standard equipment required by Law.

Large restaurants, shops, health centres and in few hotels large conference centre.

5.3.3 Energy and water

The main characteristics identified are:

Electricity is provided through the grid, except in Marsa Alam (onsite generation).

Generally, fresh water is produced onsite due to the lack of a municipal water distribution system.

The fuels used for producing steam for laundries and hot water for guest rooms and swimming

pools (in winter) are diesel and electricity, except in two hotels at Sharm El Sheikh that recently

have been connected to the natural gas grid.

LPG is only used in some kitchens at some hotels.

In Sharm El Sheikh, the natural gas distribution company is expanding the grid in the area and it

is forecast that in few years it will connect many hotels in the area.

By law, resorts are required to treat their wastewater and to either reuse or dispose the treated

effluent in an environmentally friendly way.

None or minimum presence of renewable energies (SWH, PV, wind, biogas, etc.)

20

H4-5#500@S and H3-5#400@S Resorts have been connected to the Natural Gas Grid in March 2013.

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5.4 Energy & water baselines21 and breakdown per usages

According to the information collected during the walk-through audits, the energy and water cost baselines for the last three years of the different resorts was

performed and resumed in the following table and figure.

Exhibit 37- Resume of the consumption and cost baselines for selected resorts

In terms of costs, the distribution per hotels varies from one hotel to another, but in general terms electricity is the highest cost (average 59%), followed by water

(average 28%) and diesel (13%). LPG is only used in particular hotels for the kitchens. The figure below resumes the distribution per resort.

21

The energy prices (electricity and gas) correspond to actual tariffs in 2013. For the water prices, even though that they are different form one hotel to another (different accountability criteria’s) the

homogenized price is equal to 8 EGP/m3.

H1-4#369@S H2-5#470@S H3-5#400@S H4-5#500@S H5-5#318@S H6-5#364@MA H7-4#140@MAH8-

4#313@NRS

H9-

5#700@NRS

H10-

5#292@NRS

H11-

3#522@NRS

Electricity EGP 2.570.112 4.955.870 4.072.631 5.130.604 2.897.153 2.236.338 611.843 1.594.720 2.699.739 1.509.506 2.314.272

% 48% 55% 62% 62% 56% 70% 67% 72% 37% 56% 61%

kWh 8.159.087 15.732.922 12.928.986 16.287.633 9.197.312 4.066.070 1.942.358 5.062.603 8.570.599 4.792.083 7.346.897

EGP /kWh 0,315 0,315 0,315 0,315 0,315 0,550 0,550 0,315 0,315 0,315 0,315

Diesel EGP 618.915 1.677.280 668.898 844.089 748.507 252.633 159.325 0 2.206.780 431.186 252.633

% 12% 19% 10% 10% 14% 8% 10% 0% 30% 16% 7%

l 562.650 1.524.800 608.089 767.354 680.461 229.667 144.841 0 2.006.164 391.988 229.667

EGP /l 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10

LPG EGP 0 0 147.032 185.542 0 0 0 0 0 0 0

% 0% 0% 2% 2% 0% 0% 0% 0% 0% 0% 0%

kWh 0 0 136.141 171.798 0 0 0 0 0 0 0

EGP /kWh 0,00 0,00 1,08 1,08 0,00 0,00 0,00 0,00 0,00 0,00 0,00

Water EGP 2.125.556 2.308.888 1.647.840 2.079.420 1.570.819 727.006 359.230 633.201 2.427.248 751.811 1.204.141

% 40% 26% 25% 25% 30% 23% 23% 28% 33% 28% 32%

m3 265.695 288.611 205.980 259.928 196.352 90.876 44.904 79.150 303.406 93.976 150.518

EGP /m3 8,00 8,00 8,00 8,00 8,00 8,00 8,00 8,00 8,00 8,00 8,00

TOTAL EGP 5.314.583 8.942.038 6.536.401 8.239.656 5.216.479 3.215.977 1.586.852 2.227.921 7.333.767 2.692.504 vv

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Exhibit 38- Energy cost (EGP) per resort

For the breakdown of electricity, water and diesel consumption, each resort has its own profile; however, as detailed in section 5, we estimate22

standard profiles for the

5* hotels in the Sinai, for 4 and 3* resorts in Sinai, for the hotels in Norh Red Sea (Hurghada, El Gouna, Makadi and Safaga) and another one for the resorts in Marsa

Alam (see Exhibit 39).

22

Unfortunately any of the visited hotels have completed a detailed energy audit and no measuring campaign has been recorded to adjust and validate our estimations.

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Exhibit 39- Energy and water breakdowns in four representative hotels23

23

In section 5.1, four representative hotels are defined to characterize the hotel sector in the area:

R-5@S (5* hotels at the Sinai), R-43@S (4 and 3* hotels at the Sinai), R-543@NRS (5,4 and 3* Hurgada area), R-543@MA (5,4 and 3 * in Marsa Alam)

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5.5 Key performance indicators and benchmarking

The key performance indicator for the electricity selected is the consumption per guest/night, varying

from a maximum of 74.41 kWh/PAX at the H5-5#318@S with low occupancy rates for the last two years,

to a minimum of 17.13 EGP/PAX at the H9-5#700@NRSi. As shown in Exhibit 40 the electrical

consumption per guest night is clearly higher in the Sinai resorts compared to the north Red Sea

(Hurghada, Makadi and Sahl Hasheish) and Marsa Alam hotels.

In terms of water consumption, again the H5-5#318@S, with a demand of 1.589 m3 per guest night, is

the highest and H8-4#313@NRS the minimum with 0.433 m3 per guest night. In Exhibit 40 we can

observe that also in the Sinai hotels, consumption is substantially higher than in the Red Sea.

For the diesel consumption there is not a clear correlation between the consumption and the area as

shown below

Exhibit 40- Electrical, diesel and water Key Performance Indicator

Finally, in terms of total cost per guest night (Exhibit 41), the average of the Sinai´s resort is 30 EGP/PAX,

20 EGP/PAX in Marsa Alam and 14 EGP/PAX in North Red Sea for the registered occupancy of the last

three years (see section 4.2)

In terms of international benchmarking24

, the average electrical consumption per guest night in the

Egyptian resorts is lower than typical electrical consumption values in Europe (55.5 kWh/PAX) and New

Zealand (43.1 kWh/PAX)) but higher than some other specific areas like Cyprus (24.2 kWh/PAX) and

Majorca (14.2 kWh/PAX). However due to the specificities of the Egyptian resorts (i.e. all inclusive, 365

running days and no heating), benchmarking is not very useful.

24

Bohdanowicz, P., and Martinac, I,. Detrimants and benchmarking of resource consumption in hotels-Case study of Hilton

International and Scandic in Europe. Energy and Buildings: 13, 2007

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Additionally, we analysed the correlation between energy consumption and room occupancy, due to the

fact that in our visits we found that after the 2011, even the occupancy rates decrease notoriously in

some resorts; the drop in energy consumption was not linear, due to the fact that many loads require the

same amount of energy for reaching the same levels of comfort, such as the cooling and lighting in

common areas (restaurants, lobby, etc.), water distribution and swimming pools, hot water for the

swimming pools in winter, refrigeration, etc. Our main findings suggest that the consumption per guest-

night increases with the decrease in occupancy but the relationship is not linear; it is noted that above an

occupancy rate of 70-75%, the consumption rate per guest night does not vary significantly. By contrast,

the consumption intensity increases significantly when the occupancy rate falls below 60-65%. This

analysis clarifies the situation of the H5-5#318@S, which drops from 64% in 2011 to 42% and 50% in

2011 and 2012 respectively.


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5.6 Energy and water conservation measures identified

This section summarizes the potential opportunities for energy efficiency and renewable energy

technologies in the Egyptian Tourism Sector, presenting an executive description for each proposed

opportunity and their main technical (savings and investments) and financial parameters that have been

used in the walk-through audits of the selected resorts.

The scope of technologies studied in the WTAs and the associated energy conservation measures (ECMs)

cover the following aspects:

1. Reduction of the energy and water demand (REM).

2. Improvement of the energy efficiency in the conversion of delivered energy to useful energy

(EEM).

3. On site generation (OGM)

4. Renewable generation (RES)

5. Fuel switching strategies (FSS)

6. Operation and maintenance benefits (O&M)

Exhibit 43- Areas of Energy Efficiency

The energy and water conservation measures identified are resumed in the following table.

Exhibit 44- List of the energy conservation measures

Energy Conservation Measures Classification

Code Executive Description REM EEM OGM RGM FSS O&M

ECM-1 Switching from individual splits to centralized cooling systems

x

ECM-2 Replacement of air cooled chillers to absorption chillers

x x x

ECM-3 Waste heat recovery systems x

ECM-4 Improving the envelope energy performance (windows and walls)

x x

ECM-5 Building energy management system x x

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ECM-6 Adding pressure exchangers to the desalination plants

x

ECM-7 More efficiency motors and pumps with variable speed drivers

x x

ECM-8 Replacement of central diesel boilers by SWH

x x

ECM-9 Replacement of single electrical heaters boilers by SWH

x x

ECM-10 Minimization of the evaporation and heat losses at the swimming pools

x

ECM-11 Water conservation x

ECM-12 Relamping for indoor and outdoor common areas

x x

ECM-13 Photovoltaic panels for outdoor lighting x x

ECM-14 Fuel switching to natural gas x x x

ECM-15 Cogeneration plants x x x

The definition and description for each opportunity are presented in the following subsections.

5.6.1 Improvement of the performance of the cooling systems

Description

Energy used to cover the cooling demand in Sinai and the Red Sea is the most important cost in all the

resorts, due to the high temperatures registered during a long summer season. Indeed, the equivalent

full load hours (EFLH) for the region assumed is between 2,800 and 3,200 hours (6 to 8 months of high

temperatures) according the resorts engineers and data collected as shown in the figure below.

Exhibit 45- Typical monthly electrical consumption of a resort in Sinai and Red Sea (kWh)

Exiting situation

The applied Central Air Conditioning technologies25

from the cooling load generation point of view in the

hotels are:

1. Vapour Compression26

Chillers of Air Cooled Type.

2. Vapour Compression Chillers of Water Cooled Type.

3. Absorption Chillers of Water Cooled Type27

.

25

The central air conditioning system consists of machine room (chillers and chilled water and condenser pumps), chilled water

piping network, end terminal units and controls (Fan Coils and Air Handling Units). 26

The vapor compression system is mainly based on HCFC refrigerants where compressor, that is utilizing electricity in business as

usual, drives the refrigeration cycle and in some cases the compressor is driven by engine fired by fuel. This cycle has two ways for

cooling the condenser either by air or by water, giving flexibility compared to the absorption systems where water is essential for

cooling the absorption cycle condenser.

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The standard technology used in the area is Air Cooled Chillers, however there was one hotel with

Water Cooled Chiller (H5-5#318@S ) and two hotels with Absorption Chillers using natural gas.

The estimated28

coefficients of performance (COP) for the different cooling systems are:

Exhibit 46- Coefficient of Performance of the cooling systems

Coefficient of Performance (COP)

Air Cooled Chiller System

Water Cooled Chiller System

Absorption Chiller System

Individual Split Units

3.5 5 1.2 2.7

As we can see in the exhibit above, water-cooled chillers have the highest efficiency performance

followed by the air cooled chillers, the individual splits and finally absorption chillers. However due to the

price of natural gas, very often absorption chillers might me a good option for EE. In the case of water

cooled even the energy savings are bigger than air cooled chillers, the higher water consumption and

potential problems with legionnaires disease, in particular for the tourist sector, makes this technology

not very recommendable.

In this context, the cost estimation for different technologies is presented in the following table.

Exhibit 47- Cost estimation switching air-conditioning

The two main energy efficiency measures identified during our visits are:

27

The absorption technology is mainly based on an absorbent working as secondary fluid to absorb the primary fluid. The

secondary fluid is lithium bromide and the primary fluid is water which works as refrigerant in the absorption cycle. The cooling

effect takes place through the cycle evaporator where the water is evaporated and getting the heat load required from the

surroundings, which is the chilled water circuit. No compression is applied in this technology where the cycle is driven by heat

source. Then, the heat source for the absorption cycle could be; 1) direct firing of fossil fuels, 2) steam driven, or 3) hot water driven.

One of the main features of the absorption chillers is to generate simultaneously both the cooling and heating sources to serve the

operating facility. Moreover, the maintenance requirements for absorption chillers are too much less than required for vapor

compression chillers.

It has to be noted that the absorption technology application needs the availability of heat source such as fuel (natural gas), waste

heat, or hot water. 28

This assumption was based on the technical data sheet of the installed equipment and the experts experience (due to the fact

that no measure campaign was performed during our site visits.)

System Description (€/kW)

Air Cooled Chiller System (Turn Key) 316

Machine Room (Chillers and Pumps) 165

Piping Distribution Network (Chilled Water) 51

Fan Coils and Air Handling Units 100

Water Cooled Chiller System (Turn Key) 376


Piping Distribution Network (Chilled Water and Condenser) 51

Cooling Towers 25


Absorption Chiller System (Turn Key) 440


Piping Distribution Network (Chilled Water and Condenser) 80

Cooling Towers 40


Individual Split Units (Turn Key) 142

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5.6.1.1 Switching from individual split units to centralized air cooling systems

In all the hotels visited, there are large cooling facilities for serving cool to common areas and/or guest

rooms; nevertheless, in several hotels standard split air conditioning unit for cooling the guest rooms was

also found. In this kind of resorts with individual split units for the guest rooms, there is an opportunity

for switching to centralized cooling systems when the cycle life is completed, due to higher COP ratios of

centralized equipment and the lower equivalent full load hours (EFLH) of centralized equipment versus

individual units.

In general terms, for an equivalent full load hours of 3,200 and COPs established in Exhibit 48, the annual

savings for switching from guest room splits units to centralized air cooling systems are around 35% of

the electrical consumption to satisfy the guest room cooling demand and simple paybacks based on

incremental investments (at the end of the cycle life of the existing equipment) around 2 to 3 years (over

total investment, simple payback is higher than 15 years). A detailed calculation for a representative hotel

is shown below:

Exhibit 48- Savings switching air-condition

Investment Cost for Air Cooled Central System (€/kW) 316 Investment Cost for Split Unit (€/kW) 142 Air Conditioning Equivalent Full Load Hours 3,200 Proposed Chiller COP 3.5 Split Units COP 2.7 Electrical Energy Consumption of HVAC (kWh/year) 2,651,703 The existing consumption of HVAC

Existing Split Units Installed Capacity (kW) 2,237 Summing up the installed split units

Proposed Chiller Capacity (kW) 1,790 Based on diversity factor of 80%

Anticipated Energy Savings (kWh/year) 1,015,223 Savings achieved due to the deviation in COP for both systems

Incremental Investment Cost (€) 89,048 Actual Investment (EGP) 5,141,719 Electrical Energy Cost Savings (EGP/year) 319,795 Incremental Investment Cost (EGP) 809,495 Simple Payback Period based on Incremental Investment

(Years) 2.53 Simple Payback Period based on Total Investment (Years) 16.08

5.6.1.2 Replacement of air cooled chillers to absorption chillers

In areas that are being connected to the natural gas grid like Sharm El Sheikh, there is a chance of saving

costs for producing the cooling demand through absorption chillers switching form electricity to a

cheaper fuel as natural gas. In particular, two of the resorts that have been connected to the natural gas

grid have installed two units to cover partially their cooling demand (H4-5#500@S and H3-5#400@S

resorts).

In general terms, the savings are around 40% for covering the same cooling demand and the simple

payback moves from 4 years on incremental basis (at the end of the existing cycle life of the existing

equipment) up to 15 years, on a regular basis. A detailed calculation for a representative hotel is shown

below.

Investment Cost for Absorption Chiller (€/kW) 220 The replacement for machine room only

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Investment Cost for Air Cooled Chiller (€/kW) 160

Air Conditioning Equivalent Full Load Hours 3,200

Absorption Chiller COP (Direct Fired Type) 1.2

Air Cooled Chiller COP 3 The existing operational COP for chillers

Electrical Energy Consumption of HVAC (kWh/year) 2,651,703 The existing consumption of machine room

Makeup Water Cost (EGP/m3) 4.50

Cooling Load Capacity (kW) 2,486

Investment Cost for Absorption Chiller (€) 546,914

Investment Cost for Air Cooled Chiller (€) 397,755

NG Fuel Demand to Absorption Chiller (kWh/year) 6,629,258

Water Demand to Absorption System Cooling Towers (m3/year)

18,922

Existing Air Cooled Chiller Consumption Cost (EGP/year) 835,286

NG Costs to Absorption Chiller (EGP/year) 416,625

Makeup Water Costs to Absorption Chiller (EGP/year) 85,148

Cost Savings (EGP/year) 333,513

Total Investment Cost (EGP) 4,971,774

Incremental Investment Cost (EGP) 1,355,938

Simple Payback Period based on Incremental Investment (Years)

4.07

Simple Payback Period based on Total Investment (Years) 14.91

5.6.2 Waste heat recovery systems

The heat recovery systems are mainly dependent on the waste energy (rejected heat to the atmosphere)

by the different thermodynamic cycles applied in the hotels. For example, there is high energy rejected

from the vapour compression chillers cycle through the condensers, from the reciprocating engine cycle

represented by the exhaust gases, and also from the operation of boilers through the stack gases.

All wasted energy mentioned above could be recovered using air or gas to liquid heat exchangers. This

opportunity will generate high thermal source that could be operated as base load for any heating

process in the hotel such as domestic hot water, swimming pool heating, and heat supply to the laundry

operations.

The application for the waste heat recovery system will avoid the fuel required generating the same

quantity for the recovered heat. Therefore, the following has to be noted:

1. The rejected heat in chillers is almost the same as the supplied cooling load which means

each kW of cooling meets 1 kW rejected heat, which could be recovered in form of preheating

process for the domestic hot water cycle at low temperature not exceeding 40ºC. The investment

cost for such heat exchanger is 220 €/kW and the simple payback period ranges between 3 to 4

years.

2. The rejected heat in boiler operation reaches about 15% of the total input fuel. In this

case, the most appropriate opportunity is to install economizer at the base of chimney to preheat

the makeup water of the boiler up to 85ºC. The heat content of this makeup water will reduce the

input fuel to the boiler. The investment cost for the economizer is about 350 €/kW and a payback

period of 2-3 years could be achieved.

3. The heat rejected from exhaust in engine generator sets is about 23%, in addition to the

rejected heat in the cooling system of the engine which is about 25%. The heat recovery from the

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engine exhaust costs about 260 €/kW and the simple payback period is less than 3 years.

As an example, for a typical hotel, representative calculations are detailed below.

Input Data

Investment Cost for Heat Recovery Unit (€/kW) 20

Chillers EFLH (hours/year) 3.200

Recovered Heat Load for DHW 10%

Existing Hot Water Consumption (liter/year) 298.205

Output Data

Estimated Fuel Savings (Liters/year) 29.820

Heat Exchanger Capacity (kW) 749

Investment Cost (EGP) 136.249

Energy Cost Savings (EGP) 32.802

Simple Payback Period based on Total Investment (Years) 4,2

5.6.3 Improving the building energy performance.

Improving the energy performance by improving the insulation of roof and facades of an existing hotel is

one of the most challenging energy efficiency measures to be developed in the running hotels. The main

reasons are the high investment required, their low profitability compared to other measures (e.g.

renovation of the heat or cooling production units) and the impact in the business core of the hotel,

which is caused by the fact that rooms under rehabilitation remain closed for a certain period.

All this leads to the recommendation of investing on these energy efficiency measures when a general

overhaul of the building will be performed during its lifetime.

5.6.3.1 Replacement of windows in a major overhaul

The main improvement of this measure comes from adding multiple layers29 of glazing to the present

windows in the common areas, improving the hotel energy performance. Double glazing insulates almost

twice as well as single glazing (adding a third or fourth layer of glazing results in further improvement).

Some of these windows use glass only while others use thin plastic film as the inner glazing layer.

Thickness of air space is another important issue, because with double-glazed windows the air space

between the panes of glass has a large effect on energy performance. A thin air space does not insulate

as well as a thicker one because of the conductivity through that small space. If the air space is too wide,

however, convection loops between the layers of glazing occur (24 mm maximum, combining 4mm and

4mm glass).

29

2 layers and air space > 12 mm to obtain U-values between 2.4-2.8 W/m2K. Low emissivity crystal - 1.8 W/m2K

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Exhibit 49- Glazing types and low-E glass

Source: ASHI

As an example, for a simple case of changing from a single to a double-glazed window, the calculations

are shown below:

Heat Gain through Single Glass Window (W/m2)

659.8

Heat Gain through Double Glass Window (W/m2) 332.6

Cooling System Equivalent Full Load Hours (EFLH) - Hours 3,200.00

Cooling Energy Cost (EGP/kWh)

Split Units 0.128

Packaged DX Units 0.115

Central System with water cooled Chillers 0.094

Energy Savings due to Double Glass Window (kWh/year/m2)

1,047.04

Energy Cost Savings due to Double Glass Window (EGP/year/m2)

Split Units 134

Packaged DX Units 121

Central System with water cooled Chillers 98

Investment Cost for Single Glass Window (EGP/ m2) 850

Investment Cost for Double Glass Window (EGP/ m2) 2,100

Incremental Investment Cost (EGP/m2) 1,250

For a representative hotel in the area, with 360 rooms and based on an incremental cost of double

glazing versus simple glazing analysis, the simple payback is between 9 and 13 years, depending of the

primary cooling system, as shown in the following table.

Average number of Rooms 360.0

Average Glass Area per Room (m2) 4.0

Total Glass Area (m2) 1,440.00

Energy Cost Savings due to Double Glass Window (EGP/year)

Split Units 192,915.0

Packaged DX Units 173,623.47

Central System with water cooled Chillers 141,470.97

Total Investment for Single Glass Window (EGP) 1,224,000

Total Investment for Single Glass Window (EGP) 3,024,000

Total Investment for Single Glass Window (Euros) 318,316

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Incremental Investment Cost (EGP) 1,800,00

Simple Payback Period based on Cooling System Applied (years)

Split units 9.33

Packaged DX Units 10.37

Central System with water cooled Chillers 12.72

Central System with water cooled Chillers

Investment Cost for Single Glass Window (EGP/ m2)

Due to the high payback and the fact that none of the visited hotels will perform a major overhaul in the

next three years, this energy efficiency measure was not included in the Walk-Through Audits.

Nevertheless, and taking into account that this situation might repeat in other hotels, the above

calculations could serve as a preliminary estimation of the associated investment in the area.

5.6.3.2 Energy Saving Window Film solutions

Besides the investment intensive passive measures in building renovation described in the previous

section, simple energy efficiency could be implemented in the facades of a running hotel without

affecting its operation and with interesting results, as installing solar films in windows. This practice has

become more and more popular in the last years and major vendors like 3M and Schneider Electric had

perform several projects30 in the area with good results in terms of energy efficiency, as well as in

security.

In the hotels visited, it might be interesting to install the film in the windows of the common areas. This

would achieve at least 50% of heat gain to the conditioned spaces. The analysis of this measure in the

present report applies only for the common areas (lobby, restaurants and bars), and not for the rooms

due to the difficulty to estimate the surfaces, investments and associated savings31. Applying this

measure will allow the hotel to reduce cooling demand and its energy costs, saving around a 2 to a 3.2 %

of the refrigeration consumption.

Input Data

Investment Cost (EGP/m2) 80-120

Output Data

Estimated Cooling Savings 2 – 3.2%

Simple Payback Period based on Total Investment (Years) 5 – 6 years

The investment cost of the glazing film for common areas is about 80-120 EGP/m2 and the simple

payback period is approximately 5-6 years.

5.6.4 Building energy management systems

A Building Energy Management System (BEMS) is a computer-based system that automatically monitors

and controls a range of hotel services, including air conditioning, ventilation, heating, lighting and other

energy consumers within the building or sometimes even groups of buildings. Some systems also

provide management of gas and water use.

30

Case Studies of hotels in Egypt: J.W. Marriott Mirage, Marriott Sharm El Sheikh, Cairo Sheraton Hotel, El Gezira

Sheraton Hotel, Helioplis Meridian Hotel, Meridian Le Caire Hote (lhttp://www.armashield.com/as/index.html) 31

Out of the scope of a Walk Through Audit

http://www.armashield.com/as/index.html

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The energy management programs and systems should be considered in hotels operations. These

systems could be through in-house or housekeeping performance measures concerning the efficient use

of energy.

It provides energy analysis, management and control information.

o The optimization of building and plant operations.

o Provision of energy management information, for example occupancy.

o Remote monitoring and control of services and functions of one or several buildings: lighting

operating hours, proper controls for hot water production, etc.

o It enables equipment, air conditioning, lighting, etc to be switched on and off automatically.

o Monitoring of building status and environmental conditions

The IPCC (2007) concludes that, concerning the BEMS technology, it is yet unclear how much the

technology can reduce energy usage and at what costs. Estimates provided on the technology energy

savings differ considerably and therefore the technology requires more research and development to

determine the financial requirements and costs. For example, Birtles and John (1984) estimate energy

savings up to 27 % compared to none BEMS implemented, while the IPCC notes estimates between 5 %

and 40 % (IPCC, 2007). Additionally, Roth et al. (2005) estimate energy savings up to 20 % in space

heating energy consumption and 10 % for lighting and ventilation, combining to a 5 % to 20 % overall

energy savings range32

.

For this report, this measure is included in the ”Centralizing individual cooling system (splits in rooms)

with BEMS”, due to the fact that its main goal will be control and monitoring, allowing savings of 5% of

the total electrical consumption. The estimated investment is the 5% of the cooling system cost.

5.6.5 Adding pressure exchangers to the desalination plants

The current applied technology for water desalination is the reverse osmosis (RO) technology with

turbine recovery unit. This technology gives specific energy consumption of 7-8.5 kWh per cubic meter of

production. This specific energy index could be reduced by 50% by using a pressure exchanger unit that

recovers the pressure of disposed brine to the sea water introduced to the membranes. Therefore, it is

highly recommended to introduce this concept to all installed RO plants since minor modifications are

required for the process (see figure below)

Exhibit 50- Reverse osmosis desalinated water plant

The investment cost for the pressure exchanger represents 15% as an additional cost compared to the

cost of the RO technology with turbine recovery unit. However, the investment cost for the RO

32

http://climatetechwiki.org/technology/jiqweb-bems

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technology with turbine recovery unit is about 850-1150 USD/cubic meter produced per day. The simple

payback period is 2-5 years based on the capacity of production and the selling prices for the produced

desalinated water. Therefore, this opportunity has to be studied case-by-case dependent on the RO plant

size.. For a mid-sized hotel, which has a water consumption of 50,000 m3/year, the cost might vary

between 130,000-150,000 €.

5.6.6 More efficiency motors and pumps with variable speed drivers

The presence of high efficiency motors and pumps and variable speed drivers is low at the visited resorts.

Normally, they operate at full loads, even when the demand is partial. Due to this fact, there is an

important potential in this standard energy efficiency measure, which, in general terms, can improve the

efficiency of these electrical systems up to 30%, depending on size of the pumps and operational

requirements.. The investment cost is 140-180 USD/kW for pumps in a range from 4 kW to 45 kW. The

typical simple payback period is 2.5 to 4 years.

5.6.7 Solar Water Heaters for hot water production

As seen in the Survey analysis, solar water heaters (SWH) is one of the most relevant energy efficiency

measures for the areas due to the high irradiation factor of 5.5 kWh/m2/day for much of the year.

The proposed SWH solution for the resorts would be that the central system is designed for producing

the hot water required by the swimming pools during winter time (base load); that heating capacity will

be used to cover partially the domestic hot water demand in the summer time.

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Exhibit 51- SWH central system in hotel

Exhibit 52- Typical figure of hot water demand in a resort at Sinai (diesel consumption, litres)

The average annual sum of irradiation in Egypt ranges from 2,200 to 2,400 kWh/m2. Based on this value

of irradiation, and considering 62% for solar collector efficiency to capture the heat, a total of 1,500

kWh/m2/year could be generated by the solar collector. The two main energy efficiency measures

identified during our visits were:

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Exhibit 53- Solar collector section

The main properties of the collectors are:

1.8-2.1 m2 of surface

Black painted cooper

Ultrasonically welded cooper heat absorbers coated with titanium on asset series

Glazing (prismatic/tempered glass). Transmitivity of glass: 85% toughened 4 mm Thick

High density insulation with rockwool

5.6.7.1 Solar water heaters versus central diesel boilers

Typical investment cost in Egypt is 175 €/m2 (including circulation pumps and accessories) and SWH

installations designed for covering the heat demand of hot water for the swimming pools in winter and,

additionally, producing hot domestic water for the guest rooms, which has a payback of around 8 to 9

years.

In the following table we present an example of the calculations used for the hotels with a central diesel

central boiler.

Cost of Solar Water Heater (€/m2)

175 Current SWH costs including the circulation pumps to the existing calorifiers installed in a facility.

Solar Water Heater Capacity (kWh/m2/year)

1500 The SWH average generated energy subject to the irradiation level in Egypt.

Existing Load - Output (kWh/year) 1,422,401 Swimming pool useful heat for heating

Base Load to be replaced by SWH%

45% The estimated base load to be replaced by SWH

Season Duration (months) 5 Swimming Pool Heating Season.

SWH Size (m2) 1,024 The calculated required area for SWH collectors.

Investment Cost of SWH (€) 179,223

Energy Avoided for Heating (Swimming Pool)

640,080

Energy Avoided to Domestic Heating (kWh/year)

896,113

Equivalent Fuel Savings 1,807,286 The fuel avoided from the existing heating system.

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(kWh/year)

Fuel Cost Savings (EGP/year) 185,411


Simple Payback Period (Years) 8.79

5.6.7.2 Solar water heaters versus electrical heaters

In the hotels with electrical heaters, compared with the previous situation, the payback decrease to 7 to 8

years for the same assumptions. In the following table we present an example of the calculations used for

the hotels with electrical heaters.

Cost of Solar Water Heater (€/m2) 175 Current SWH costs including the circulation pumps to the existing calorifiers installed in a facility.

Solar Water Heater Capacity (kWh/m2/year)

1500 The SWH average generated energy subject to the irradiation level in Egypt.

Existing Load - Output (kWh/year) 1,422,401 Swimming pool useful heat for heating

Base Load to be replaced by SWH% 45% The estimated base load to be replaced by SWH

Season Duration (months) 5 Swimming Pool Heating Season.

SWH Size (m2) 1,024 The calculated required area for SWH collectors.

Investment Cost of SWH (€) 179,223

Energy Avoided for Heating (Swimming Pool)

640,080

Energy Avoided to Domestic Heating (kWh/year)

896,113

Equivalent Fuel Savings (kWh/year) 2,048,257 The fuel avoided from the existing heating system.

Fuel Cost Savings (EGP/year) 210,151 ELECTRICIY PRICE



5.6.8 Minimization of the evaporation and heat losses at the swimming pools

The presence of huge surface areas of swimming pools increases the makeup water in the summer

season and the surface heat loss in the winter season.

From the energy efficiency’s viewpoint, it is highly recommended to install full cover for the swimming

pools for off use periods (from 7:00 pm to 7:00 am), which will reduce the evaporation rate or heat loss

from the surface in winter. This cover could be made by plastic sheets or by plastic balls floating on the

surface of the swimming pool. This method will achieve energy reduction for heating between 5-10%

related to the pool surface losses, and 25-30% of makeup water to the pool. The investment estimated is

75-125 EGP per m2. The savings can be calculated through the fuel input for heating the pools and an

estimation of makeup water saved. In general, the simple payback period is less than 1.5 years.

Nevertheless, this energy conservation measure is not very accepted in all hotels, for very often it is

considered to have a negative visual impact to the guest.

Input Data

Investment Cost for Pool Cover (EGP/m2) 100

Makeup water to the pool (m3/year) 41.196

Pool Heating Consumption (kWh/year) 1.902.292

Estimated Savings in makeup water 25%

Estimated Savings for Pool Heating 5%

Swimming Pool Area (m2) 1.000

Water Cost (EGP/m3) 4,50

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Output Data

Estimated Fuel Savings (Liters/year) - Diesel 7.601

Estimated Fuel Savings (kg/year) - LPG 1.021

Estimated Water Savings (m3/year) 10.299

Investment Cost (EGP) 100.000

Energy Cost Savings (EGP) 55.809

Simple Payback Period based on Total Investment (Years) 1,8

5.6.9 Water conservation

To reduce water demand, the hotels must have efficient equipment; another way would be to educate

both in-house staff and customers.

To improve equipment, the following is recommended:

Upgrade or retrofit equipment with efficient laundering;

Upgrade dishwashers, ice machines, and steam cookers to ENERGY STAR® qualified models

where appropriate. These models reduce water and energy use by at least 10%, by reusing water

throughout cycles;

Use faucet aerators in the rooms, bar, restaurant, etc;

Look for efficient pre-rinse spray valves, food disposal systems, combination ovens, steam kettles,

and steam cookers to use significantly less water;

Consider replacing equipment that normally discharges water continuously, such as dipper wells

or wok stoves, with more efficient models; another way would be to turn this equipment off

when not in use.

For the guest:

leave open the possibility of reusing towels and bed linens in order to cut down the amount of

water used in laundry equipment;

Awareness campaign (in rooms, toilets, etc.)

For the staff:

Educate users on proper dishware prep and loading techniques, in order to reduce the overall

amount of water used.

The savings could amount to 10% of the water used for the guest and in the kitchen. In general, the

simple payback period is 2 years, but this is only estimation; this measure depends on the guest’s

behaviour and the staff operation.

5.6.10 LED relamping for indoor and outdoor common areas (+8 working hours/day)

The presence of large landscape areas in hotels and the decorative lighting system draws attention to the

utilization of efficient lighting technologies. During our site visits, many differences between each other

where found, i.e.: the Hyatt Sharm has already carried out a LED replacement in common areas to some

others like H2-5#470@S that in 2011 completed a full renovation but the lighting is very inefficient

(halogens and incandescent lamps). In general, there is an important potential for electricity saving in the

actual lighting facilities with the existing available technology in Egypt.

The LED technology has promoted different lamp types that could replace any of the

conventional/inefficient lighting units. To this regard, LED lighting technology implementation is highly

recommended in outdoor and indoor lighting systems, in hotels where the daily operating hours exceed

8 hours to achieve short payback period. However, the LED implementation in guest rooms will have high

payback period because the daily operating hours are very low and most of the hotels have Low

Consumption Bulbs (LCB) installed.

Typical renovation for incandescent lamps, halogens and metal halides is lower than 3 to 4 years and

different investment opportunities were found in the resorts, as presented in section 4.1. For a

representative case, calculations are detailed below.

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Input Data Outdoor Common areas

Cost of LED Lighting (€/Lamp of 6 Watt) 9 9

Lighting Consumption (kWh/year) 285.480 177.000

% of Lighting Retrofit 30% 30%

Operating Hours Daily 10 10

Output Data Number of Lamps to be Replaced 469 291

Investment Cost (€) 4.224 2.619

Energy Avoided (kWh) 75.367 46.728

Electrical Energy Cost Savings (EGP/year) 23.741 14.719

Total Investment Cost (EGP) 38.395 23.805

Simple Payback Period (Years) 1,62 1,62

5.6.11 PV panels for outdoor lighting

The main opportunity of PV application is considered to serve the demand of landscape and the outdoor

lighting system due to the high irradiation factor in Egypt (above 5.5 kWh/m2/day). Indeed, it is

considered standard modules of 15 kW capacity with storage system in order to feed energy supply to

the different lighting circuits. Typical investment cost is 2.50 €/W and, with the actual electrical tariff, the

payback is over 15 years.

An example of the calculations used in the WTAs is resumed in the following table.

Cost of LED Lighting (€/Lamp of 6 Watt) 9

Lighting Consumption (kWh/year) 250,000 Consumption for public areas.

% of Lighting Retrofit 30% Estimated value for consumption to be retrofitted.

Operating Hours Daily 10

Number of Lamps to be Replaced 411

Investment Cost (€) 3,699

Energy Avoided (kWh) 66,000

Electrical Energy Cost Savings (EGP/year) 20,790

Total Investment Cost (EGP) 33,623


5.6.12 Fuel switching to natural gas

As was previously mentioned, some regions in the Sinai are being connected to the natural gas grid, as it

is being expanded by the gas utility. Most of the hotels in the Red Sea and South Sinai area are utilizing

diesel in their combustion systems. The benefits in this energy conservation measure are clear: less

greenhouse gas emissions, combustion efficiency improvement, removal for risks in fuel oil loading,

transportation and unloading.

Nowadays, the actual price for diesel is 1.1 EGP/ litre or 0.1026 EGP/kWh33

; by contrast, the actual gas

tariff is 2.65 USD/million Btu at 0.0628 EGP/kWh34

. Therefore, the energy cost savings due to switching to

natural gas will be of 0.0398 EGP/kWh (38% savings) considering the same efficiency for both systems

firing natural gas and diesel.

Typical investment cost in Egypt are presented in the following tables, paybacks use to be lower than 4

years or the connected resorts.

33

Conversion rate is 1 liter of diesel is equal to 10.72 kWh heating value 34

Conversion rate:10.11 kWh/m3 – heating value

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Gas Pressure Regulating Station - PRS (m3/hr) 91

Investment cost for PRS (€/m3) 90

Internal Distribution Network (€/m3) 55

Dual Fuel Burner Cost (€/m3) 70

External Piping Network Cost (€/m3) 600

As an example, the calculation module for hotel consuming 450,000 liter of diesel per year is:

Diesel Consumption (liter/year) 450,000 The existing Diesel Consumption

Equivalent Natural Gas Consumption (m3/yr.) 477,198 Energy generated by Natural Gas (kWh/yr.) 4,825,000 Anticipated Energy Cost Savings (EGP/yr.) 191,766 Gas Pressure Regulating Station - PRS (m3/hr) 91 Investment cost for PRS (€/m3) 90 Internal Distribution Network (€/m3) 55 Dual Fuel Burner Cost (€/m3) 70 External Piping Network Cost (€/m3) 600 Total Investment Cost (EGP) 672,656 Simple Payback Period (years) 3.51 It has to be noted that the simple payback will be shorter than 3 years in case of hotel high consumption

because the cost for external piping falls below 400 €/m3.

5.6.13 Cogeneration or trigeneration plants for natural gas grid connected areas

Cogeneration (or combined heat and power, CHP) is the simultaneous production of electricity and

thermal energy from the same fuel source. It can be applied to any hotel that is going to be connected to

the natural gas grid in Sharm El Sheikh, where there is a need for both heat energy and electrical power.

Moreover, the trigeneration (or combined cooling, heat and power, CCHP) is simultaneous conversion of

a fuel into three useful products: electricity, hot water or steam and chilled water. The application of both

systems is significantly increasing the overall system efficiency, which double the efficiency of the single

generation system. This improvement in system efficiency reduces the input fuel to the system and

severe reduction in GHG emissions.

Exhibit 54- Cogeneration or trigeneration systems

Source: USEPA

The viability of CHP (sometimes termed utilization factor), especially in smaller CHP installations similar to

the ones required for the resorts, depends on a good base load of operation, both in terms of an on-site

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electrical demand and heat or cooling demand. In practice, an exact match between the heat and

electricity needs rarely exists.

The systems selected for the visited hotels are gas

engine CHP plants use a reciprocating gas engine

operating in topping cycle35

, since they are generally

more competitive than a gas turbine up to about 5

MW. These plants are generally manufactured as fully

packaged units that can be installed within a plant

room or external plant compound with simple

connections to the site's gas supply and electrical

distribution and heating systems. A typical example is

reproduced in the picture.

For a typical hotel of the area, the decision for the

cogeneration technology application in hotels is

mainly dependent on the thermal to electric

consumption ratio (TER). This ratio leads to the technology to be selected if it would go for gas engines,

gas turbines, or steam turbines. Therefore, the selection criteria is:

Type Available Process

Heat

TER

Steam Turbine 120°C to 400°C 2:l to 30:1

Gas Turbine 120°C to 500°C 1.2:1 to 4:l

Reciprocating

Engine

80°C to 120°C 0.8:1

For hotels, and according to their consumption records, the TER is 1:1 in most cases, where the

reciprocating engines are the most appropriate technology for cogeneration. The calculation module is

as follows:

Investment Cost for Gas Engine Generator Set (€/kW) 550

Investment Cost for Waste Heat Recovery Boiler (€/kW) 160

Investment Cost for the balance of Cogeneration Plant (€/kW)

100

Thermal to Electric Ratio of Gas Engine 1 Engine technical data sheet

Electricity Efficiency of Cogeneration System 35%

Facility Load Factor (Ratio between Average and Peak Demand)

70% From hotel invoices to be calculated

Electrical Energy Consumption of Facility (kWh/year) 3,500,000

Facility Average Demand (kW)

400

Facility Peak Demand (kW) - Cogeneration Size 571

Electrical Energy Generated by Cogeneration (kWh/year) 3,500,000

Demonstrated Thermal Energy by Cogeneration (kWh/year) 3,500,000

Facility Thermal Energy by Cogeneration (kWh/year) 3,500,000 Useful heat

Gas Demand for Cogeneration Unit (kWh/year) 10,000,000

Avoided Fuel to thermal energy demand (kWh/year) 4,117,647 Input heat considering the overall thermal efficiency of existing system, i.e. boilers/heaters.

Cogeneration Fuel Cost (EGP/year) 628,464

35

In a topping cycle the generation of electricity is leading to match the facility electrical load and the thermal energy is following

to supply the facility thermal load

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Avoided Electrical Energy Costs (EGP/year) 1,102,500 The costs by utility

Avoided Thermal Energy Costs (EGP/year) 422,432 The costs of fuel used by the existing system

Cogeneration Maintenance Cost (EGP/year) 142,689

Cogeneration Overall Efficiency 70.0%

Cost Savings (EGP/year) 753,779


Simple Payback Period based on Total Investment (Years) 5.58

The hotels that have an actual potential of cogeneration are the H4-5#500@S , H3-5#400@S and H5-

5#318@S ; a brief analysis was performed in order to evaluate the investments, energy savings and

financial parameters, their results being shown in the table below.

Exhibit 55- Resume of the cogeneration investments

5.6.14 Additional energy conservation measures

During our site visits, we identified some additional energy conservation measures that may be possible

to implement; however, they require a deeper analysis due to the lack of references (investment and

savings) in Egypt.

The two main measures are:

1. Producing biogas from the sludge produced at the wastewater plants, which will be used to

produce heat and/or electricity.

2. Investing in a cogeneration of electricity and desalinated sea water using Concentrated Solar

Power (CSP), as presented in the following picture. (see Annex F for a typical case in Egypt)

InputData SAVOY5* SIERRA5* MARITIME5*InvestmentCostforGasEngineGeneratorSet(€/kW) 550 550 550

InvestmentCostforWasteHeatRecoveryBoiler(€/kW) 160 160 160

InvestmentCostforthebalanceofCogenerationPlant(€/kW) 100 100 100

ThermaltoElectricRatioofGasEngine 1.2 1.2 1.2

ElectricityEfficiencyofCogenerationSystem 35% 35% 35%

FacilityLoadFactor(RatiobetweenAverageandPeakDemand) 70% 70% 70%

OutputData

FacilityAverageDemand(kW) 1,859 1,476 700FacilityPeakDemand(kW)-CogenerationSize 2,656 2,108 1,000ElectricalEnergyGeneratedbyCogeneration(kWh/year) 16,287,633 12,928,986 6,131,541GasDemandforGogenerationUnit(kWh/year) 46,536,093 36,939,960 17,518,689

CogenerationMaintenanceCost(EGP/year) 664,020 527,093 249,973TotalInvestmentCost(EGP) 19,558,403 15,525,296 7,362,835

CostSavings(EGP/year) 2,621,038 2,079,109 1,328,982

SimplePaybackPeriodbasedonTotalInvestment(Years) 7.46 7.47 5.54

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Exhibit 56- CSP-DSW Plant Conceptual Design with added RO modality

Source: The Cyprus Institute

5.7 Feasibility studies per resort

To evaluate the economic impact of the measures assessed as part of this project, the Consultant has

developed a simplified financial model, following a free cash flow to the project perspective.

Individual financial models for each measure are presented in Annexes D to N of this report. Indeed,

resorts with CHP potential include two versions of the files (with or without CHP numbers). In the

following section, the CHP investment is not included in order to facilitate benchmark analysis.

In addition to gas and electricity prices presented in Annex A, performing the financial analysis requires

defining two additional parameters that were considered as input data in the model. These parameters

are presented in the table below:

Input Parameter Value

Discount rate 15%

Corporate profit tax 20%

A resume of the WTA per each resort is provided in Annex D of this report.

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5.8 Main outcomes of the WTAs

According to the results analysed in the previous sections and Annex D, the tables below resume the

outcome of the resorts visited.

Exhibit 57- WTAs resume (CHP results not included)

Exhibit 58- CHP resume

For the eleven WTAs, the total investment in sustainable energy (not including CHP) is over 82 million

EGP (8.8 million EUR), with a minimum investment per resort of 3.9 million EGP (0.11 million EUR) up to

13.5 million EGP (1,45 million EUR), being the solar water heaters and the central chillers the main

investments for the majority of the resorts. This investment will increase notoriously in the hotels that are

being connected to the natural gas grid, as can be seen in Exhibit 57

In general terms, the saving potential is high and the total CO2 saving potential will be more than 28,500

tCO2/year, not including CHP (more than 55,000 tCO2/year including CHP).

In terms of economical and financial results, while the payback varies from 2,8 years up to 6,2 years, the

IRRs varies from 18% to 42%. Typical CHP IRRs are around 15%.

Payback IRR NPV

H1-4#369@S 10,218,403 1,446,796 5,314,583 27% 2,107 4.0 30 2,862,519

H2-5#470@S 7,107,423 1,640,347 8,942,038 18% 2,879 6.1 19 1,171,445

H3-5#400@S 7,694,964 1,946,738 6,536,401 30% 2,040 4.8 22 2,953,766

H4-5#500@S 7,913,852 1,650,492 8,239,656 20% 1,351 5.5 18 1,275,746

H5-5#318@S 4,831,141 1,134,248 5,216,479 22% 1,516 5.3 20 1,194,817

H6-5#364@MA 4,779,158 774,392 3,215,977 24% 721 2.8 42 1,632,833

H7-4#140@MA 3,922,888 531,795 1,586,852 34% 659 3.4 36 803,102

H8-4#313@NRS 6,323,826 564,855 2,227,921 25% 820 3.1 34 1,142,773

H9-5#700@NRS 13,567,560 1,482,180 7,333,767 20% 2,527 5.7 21 24,874

H10-5#292@NRS 8,047,202 1,082,924 2,692,504 40% 1,848 4.5 25 1,203,403

H11-3#522@NRS 9,539,650 668,424 3,771,046 18% 952 3.4 33 1,094,386

After-taxEnergy Cost

(EGP)Hotel

Anual

saving

(EGP/year)

Energy

Savings (%)

Saving

(tCO2/yr)

Estimated

total CAPEX

(EGP)

Payback IRR NPV

H5-5#318@S 7,362,835 1,941,746 1,957 5.0 18.5 1,363,631

H4-5#500@S 19,558,403 3,756,932 2,337 6.0 13.9 965,709

H3-5#400@S 15,525,296 2,980,617 1,852 6.0 13.9 -774,090

Saving

(tCO2/yr)

After-tax

Hotel

Estimated

total CAPEX

(EGP)

Anual

saving

(EGP/year)

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6 Technical and Market Potential

In order to determine the market potential and the investment plan, due to the fact of relevant

differences (energy characterization and energy efficiency solutions) detected during the WTAs in the

different resorts, as well as some common characteristics and energy conservation measures, we will

forecast the market potential based in for representative resorts or prototypes (see section 5.1) and a

“pool” of different technologies that will improve the sustainability of the hotels (see section 5.2).

At the same time two different scenarios (section 5.4) will be defined in order to estimate the number of

projects per year, being one more conservative and the second one more optimistic depending on how

the actual market barriers could be mitigated (see section 5.3).

6.1 Energy characterization: prototypes definition

As presented in the previous section, each hotel analysis is different to the others due to varying size,

occupancy rates, energy and water breakdowns, energy prices, facilities, etc. However, it is also true that

we identified some common issues that allow us to define a few patterns or prototypes that allow us to

represent a large portion of the 586 resorts in the area; particularly 5*, 4* and 3*, which account for

almost the 90% of the rooms available in the area which represents the technical market.

The determining variables for the identification of the prototypes are:

Location: In general, Sinai resorts have higher energy consumption per guest night than the Red

Sea area including Marsa Alam.

Connection to the electrical grid: Marsa Alam resorts are isolated from the electrical grid and this

affects the electricity prices paid by the resorts.

Connection to the natural gas grid: Actually Sharm el Sheikh and in the future Hurghada area are

or will be connected to the natural gas grid. This will create large investments opportunities in

the connected hotels for the H5-5#318@S , H4-5#500@S and H3-5#400@S resorts.

Category of the resort at the South Sinai area: In general, 5* resorts are characterized for their

luxury and exclusive facilities (guest rooms, restaurants, number of swimming pools, spas, stores,

etc.).

HVAC technology: Cooling represents the higher energy demand at the resorts, due to the high

temperatures all throughout the year. In 5* hotels in Sinai, they normally use central chillers for

common areas and guest rooms; however, 4* and 3* normally use split units for the guest rooms.

At the Red Sea area, the majority of the resorts (5*, 4* and 3*) used split units for cooling the

guest rooms.

Steam & hot water production: 5* SINAI´s resorts produced their hot water with central diesel

boilers, while hotels in the Red Sea very often used electrical heaters for the guest rooms.

According to the variables described above, the 5*, 4* and 3* in the South Sinai and Red Sea are divided

into four segments: 5* at Sinai; 4* and 3* at Sinai; 5*, 4* and 3* at North Red Sea; 5*, 4* and 3* at Marsa

Alam. For the estimations of the market potential and the investment plan, we assign one prototype for

each segment, as shown in the exhibit below. That characterization will facilitate the decision by which

energy efficiency measures correspond to each prototype (see section 5.2), as well as the average

investment and financial results per resort.

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Exhibit 59- Prototypes defined according to the main variables that affect energy consumption

At the same time, these prototypes would represent the 90% of the room capacity of the study (technical

market), and each prototype would define one of the segments defined, as illustrated in the following

figure.

Exhibit 60- Technical market: Number and percentage of hotels per prototype segment

6.2 Energy efficiency solutions

Mixes of the energy conservation measures identified in the WTAS and resumed in at section 4.6 are

selected, if applicable, for each prototype.

SINAI

RED SEA

North RD

Marsa Alam

5* SINAI

4*-3* SINAI

5*-4*-3*North RD

5* 4*-3* Marsa Alam

Centralized HVAC Split units for GR

Split units for GR Split units for GR

Diesel for DHW Diesel for DHW

Electricity for DHW Electricity for DHW

LOCATION CONNECTION TO THE

ELECTRICAL GRID CATEGORY HVAC HOT WATER PROTOTYPES R-5@S

R-43@S

R-543@MA

R-543@NRS

R-5@S21%

R-43@S28%

R-543@NRS39%

R-543@MA12%

R-5@S#52

R-43@S#147

R-543@NRS#146

R-543@MA#44

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Exhibit 61- List of the energy conservation measures36

Therefore for each prototype, we can estimate the investment and the expected savings resulting from

the economical/financial results in average with the WTAs.

6.3 Market barriers and constraints

The following table summarizes the main barriers to EE and RE investments in the Commercial sector.

Exhibit 62- Market Barriers and way to overcome

BARRIERS Comments Way to overcome Time to

implement

Lack of Legislative and Regulatory Framework

As seen in chapter 2, actually there are no laws, regulations or effective policies to promote energy efficiency and renewable energy in Egypt. Also, there is no clear and comprehensive strategy and/or program for improving EE & RE. Notwithstanding the creation of the new Energy Efficiency Unit, still there is no dedicated institution that has clear implementation and executive authority for pursuing energy efficiency objectives

Accelerating the adoption of the Bylaws and new directives for energy efficiency and renewable energy.

Medium-Long Term (2-3 year at least)

Financial Constrains

Hotels are very much interested in reducing energy expenditures (which represent around 6 to 8 per cent of their annual costs or even more), but hotels owners are facing with financial constraints, mainly due to reduction in the number of tourist in the last two years resulting from the instability in the Middle East.

Dialogue with Business Associations, Local Banks, International Donors and IFIs to individuate possible alternative financing tools or mechanisms to introduce EE&RE component into loan products specifically intended for hotels

Short / Medium Term (1 year)

36

REM: Reduction of the energy and water demand; EEM: improvement of the energy efficiency in the conversion of delivered

energy to useful energy; OGM: on site generation; RES: renewable generation, FSS: fuel switching strategies and O&M: operation

and maintenance benefits

Code Executive Description REM EEM OGM RGM FSS O&M

ECM-1 Switching from individual splits to centralized cooling systems x

ECM-2 Replacement of air cooled chillers to absorption chilers x x x

ECM-3 Waste heat recovey systems x

ECM-4 Improving the envelope energy performance (windows and walls) x x

ECM-5 Building energy management system x x

ECM-6 Adding pressure exchangers to the desalination plants x

ECM-7 More efficiency motors and pumps with variable speed drivers x x

ECM-8 Replacement of central diesel boilers by SWH x x

ECM-9 Replacement of single electrical heaters boilers by SWH x x

ECM-10 Minimization of the evaporation and heat losses at the swimming pools x

ECM-11 Water conservation x

ECM-12 Relamping for indoor and outdoor common areas x x

ECM-13 Photovoltaic panels for outdoor lighting x x

ECM-14 Fuel switching to natural gas x x x

ECM-15 Cogeneration plants x x x

ECM-16Cogeneration of Desalinated Sea Water (DSW) and electricity using

Concentrated Solar Power (CSP) x x x x

ECM-17 Centralized biogas plants x x x

Energy Conservation Measures Clasification

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Profitability of EE measures for end users

The conventional energy prices are still heavily subsidized in Egypt. Due to the low prices of electricity, natural gas and diesel, the pay-back period of some EE measures is often beyond the acceptable level for commercial sector end-user.

Energy Efficiency in hotels could be addressed by upstream sufficient sustainable resources. This requires dialogue with the Government, International Institutions and local banks to customize existing and/or newly financing mechanisms.

Medium Term (2-3 years )

High cost of initial investment

Despite some subsidies in SWH, the initial investments for RE and EE measures remain high or very high and profitability is low, which does not allow the development of a spontaneous market for EE measures.

Creation and implementation of National Funds for the promotion of EE and RE.

Medium –Long Term (2 year at least)

Low interest and lack of awareness of end user toward EE and RES technologies, their economic results and financial mechanisms

The penetration rate of EE and RE measures in the hotel sector is very low and almost limited to SWH systems and a few EE technologies like lighting. Effective results of these measures, mainly in terms of achievable savings, are not diffused in Egypt and are not well understood by the potential end-users. This limits a wider diffusion of EE measures and techniques in the hotel sector.

Policy dialogue, requiring cooperation with Government (and International Donors and Institutions to introduce additional regulatory measures on energy efficiency minimum requirements for buildings and/or specific obligation to install EE and/or RE systems in resorts.

Information and educational campaigns through different stakeholders, like governmental institutions, Egyptian Hotel Association, Engineering Associations, Architectures, vendors, etc.

Short-Medium

term (1 year at

least)

Lack of energy services companies (ESCOS)

Though perception for ESCOS is good (Survey, chapter 3), actually there are no relevant ESCOs working in Egypt that could foster the improvement of the sustainability of the hotels.

Identifying national players that aim to develop the first pilot projects and assisting them with technical and specific know-how in energy services contracts and risk management through international cooperation.

Short-Medium

term (1 year at

least)

6.4 SWOT analysis

In the perspective of a SWOT analysis the following table summarizes the main aspects:

Strengths Weaknesses

High occupancy rates Lack of interest and lack of awareness in EE and RE technologies

Excellent qualitative services Lack of expertise

Qualified technical experts/engineers High initial investment

New technologies available at the local markets Low profitability

International and national chains that include “sustainability” in their social responsibility

Financial constraints of local markets

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Opportunities Threats

Energy Efficiency Regulation Government keeps subsidizing

Energy Efficiency Action Plan Political instability

Financing European economical crisis

Natural Gas pipeline

6.5 Investment plans

In order to forecast the success of the energy efficiency and renewable energy program in the hotel

sector in Egypt, two different scenarios are defined depending on how the market barriers are solved in

the short-medium term (up to 2015) and long term (up to 2020).

1. Conservative scenario:

a. Subsidies are removed smoothly and energy prices increase at CPI annually.

b. For SWH, promotion and subsidies continue in the same amount as exiting plans.

c. Awareness and promotion campaign increases gradually.

d. For energy efficiency technologies (high efficiency chillers, motors, speed variable drives),

custom taxes are gradually removed.

e. A National Energy Efficiency Action Plan (NEEAP) is operative in the medium term.

f. Funding for EE and RE projects are available

2. Optimistic scenario:

a. Subsidies are removed more aggressively in the short term.

b. A National Energy Efficiency Action Plan (NEEAP) is operative in the short term.

c. The building standards are more restrictive in terms of energy consumption per m2.

d. Incentives for investing in energy efficiency and renewable energy are available in the

short term (fiscal incentives, grants, custom exemptions, etc.).

e. Large funding for EE and RE projects are available

f. Awareness and promotion campaign increases substantially.

g. International Carbon Markets reach CO2 prices around 15 to 20 €/ton.

h. International tourists and/or tour operators demand higher “green” commitment from

the resorts and hotels step forward to a “ecofriendly” positioning.

i. Growth of the natural gas network in the areas.

j. The EBRD also finance double/triple glazing in major overhauls.

According to these scenarios and the number of hotels per prototype segment presented in section ‎5.1

we assume the following percentages for full renovation up to 2020 per prototype segment (over the

actual number of hotels):

Market Potential:

Conservative scenario:

20% of the R-5@S segment


5% of the R-543@NRS segment

15% of the R-543@MA segment

Optimistic scenario:



10% of the R-543@NRS segment

30% of the R-543@MA segment

10 major overhauls up to 2020

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Exhibit 63- Number of projects and associated investment -Conservative Scenario

For the conservative scenario, we forecast a higher number of projects and investment in the Sinai area,

mainly due to the existing natural gas extension plan in Sharm El Sheikh.

Exhibit 64- Number of projects and associated investment -Optimistic Scenario

For the conservative and optimistic scenario, we forecast a higher number of projects and investment in

the Sinai area, mainly due to the existing natural gas extension plan in Sharm El Sheikh; the main

difference between both scenarios is the success in the promotion of EE and RE financing mechanism in

both areas.

Exhibit 65 - Number of projects and associated investment in detail

Short term (up to 2015) Long term (up to 2020)

Estimated number

of projects

(n)

Estimated average

investment per client

(Euros)

Business Opportunity

(Euros)

Estimated number

of projects

(n)

Estimated average

investment per client

(Euros)

Business opportunity

(Euros)

Conservative Scenario

R-5@S 2 1,375,00 2,750,000 8 1,531,250 12,250,000 R-43@S 3 1,000,00 3,000,000 12 812,500 9,750,000

R-543@NRS 2 750,00 1,500,000 6 1,083,333 6,500,000 R-543@MA 2 400,00 800,000 5 400,000 2,000,000

TOTAL 9 894,444 8,050,000 31 983,871 30,500,000

Optimistic Scenario

R-5@S 3 1,583,333 4,750,000 13 1,519,231 19,750,000 R-43@S 6 875,000 5,250,000 24 937,500 22,500,000

R-543@NRS 2 750,000 1,500,000 13 1,057,692 13,750,000 R-543@MA 4 400,000 1,600,000 9 400,000 3,600,000

Major overhaul

2 300,000 600,000 8 300,000 2,400,000

TOTAL 17 781,667 13,700,000 67 842,885 62,000,000

Average

Credit financing

line 3 1,500,000 3,750,000 11 1,523,810 16,000,000

ESCO 0 na 0 0 na 0 TOTAL 13 836,538 10,875,000 49 943,878 46,250,000

0

5

10

15

20

Shortterm(upto2015) LongTerm(upto2020)

R-5@S

R-43@S

R-543@NRS

R-543@MA

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000


R-5@S

R-43@S

R-543@NRS

R-543@MA

0

2

4

6

8

10

12

14

16

18

20


R-5@S

R-43@S

R-543@NRS

R-543@MA

MajorOverhaul

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000


R-5@S

R-43@S

R-543@NRS

R-543@MA

MajorOverhaul

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Finally, Exhibit 66 resumes both optimistic and conservative scenarios presenting the average number of

project and associated investment in the short and long term for the four prototypes of hotels and

potential major overhauls.

Exhibit 66- Average number of projects and associated investment

According to these investment estimations per hotel and taking into the account the estimations for the

total number of hotels (above 3*) in the area in the Red Sea, the total potential market for financing

opportunities in sustainable energy will be close to 400-500 million Euros. If we consider that the

75% of the rooms available in Egypt are in the Red Sea area, we can estimate that the total potential for

Egypt would be over 600 million Euros.

MarketpotentialofEEinvestment

projectsinTertiarysector

Shortterm Longterm Shortterm Longterm

upto2015 upto2020 upto2015 upto2020

(n) (n) (thous.€) (thous.€) (thous.€)

R-5@S 3 11 1,512 1 3,750 16,000

R-43@S 5 18 906 1 4,125 16,125

R-543@NRS 2 10 908 1 1,500 10,125

R-543@MA 3 7 400 1 1,200 2,800

MajorOverhaul 1 4 300 1 300 1,200

Est.numberofprojects

EEmeasures:Lighitng,VFD,Boilers,AC

equipment,CoolingSystem(Chillers,

refrigerationtowers,),SWH,Insulation

PotentialforEBRDTypical

Investment

size

Suitable

EBRD

Funding

type*

TOTAL 13 49 10,875 46,250

(*) Typical types of EBRD funding: 1. Credit line facility (up to M€ 5), 2. Direct lending facility (M 5 to 15), 3. Direct lending (over

M€ 10), 4. ESCO.

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7 Main findings and recommendations

During the elaboration of this study some relevant findings were identified, which are summarised in the

following sections.

7.1 Perception of a severe increments in the energy prices is a key driver for EE and RE projects

The hotel industry is aware that the energy prices are highly subsidized. Indeed, February this year, the

government raised the price of fuel oil, which is widely used in energy-intensive local industries, to 1,500

EGP per tonne (an increase of about 50% the previous quotes). The perception of the hotel sector is that

energy prices will increase notoriously in the short term.

The energy cost represents 5% of their sales for more than 50% of resorts in the area; an increase in the

energy costs will affect negatively their profitability due to actual constraints to increase the sale price per

room in a competitive market. Owners and general managers are very concerned about the impact of

these future increments in the total operational costs of their facilities, as well as on how to control or

minimize the effect in annual budgets. They are becoming proactive in the research of energy efficiency

solutions and stand with their “ears and eyes” opened to new technologies that save energy and reduce

costs.

Implications

This could generate an interesting potential demand for loan products with EE components.

Recommendations

Obviously, such a demand needs to be further investigated. Any involvement in this sector could require

dialogue with the Business Association, local banks and an in-depth analysis of the competitive

framework to assess particular opportunities.

7.2 Hotel chains are key players to open the market

Some international and national hotel chains have a relevant presence in both areas, as Travco Group,

Marriot, Intercontinental, Sheraton and Mövenpeick; some of them already show a high interest in survey

and in collaborating with the study offering us to visit their resorts, like Travco Group. Indeed, we had a

meeting with them in their headquarters in Cairo37

: we found them to be very encouraged in the

identification of energy efficiency and renewable energy improvement at their hotels and they were very

enthusiastic in participating in the study.

Our experience in the hotel sector indicates that there are “leaders” for the implementation of innovative

projects that can open the market for the rest of the resorts that are waiting to know the results of these

projects, and if a positive experience is proven, they will try to implement in the future.

Implications

This could generate an interesting potential demand for loan products with EE components for large

companies (direct lending facilities), but also open the market for the rest of the resorts.

Recommendations

Identify and negotiate with key players and leaders that are keen to develop energy efficiency and

renewable energy projects at some of their hotels in order to define with them customized plans in the

short to medium term.

37

Meeting with Mr. Wael Ahmed, General Manager Energy & Utilities ([email protected])

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7.3 High saving potential, reasonable paybacks but low penetration of energy efficiency technologies

As reviewed in the walk through audits and in the characterization of EE and RE measures, the potential

in the tertiary sector is high (over 15% and up to 50%) and the paybacks are interesting with the actual

energy prices for large consumers). However, the penetration of mature energy efficiency and renewable

energy (SWH) technologies is still low.

Implications

The low penetration for EE and RE projects points out the existing constraints in different sub-sectors

(lack of interest, high initial investment costs compared to limited financial resources, lack of

demonstration projects and references, etc.) and the persistent difficulties to achieve concrete results due

to the lack of a spontaneous market for EE and RES.

Recommendations

We recommend further concentrated efforts with the National Institutions and International Donors, in

order to set out possible packages of mature EE and RE technologies in the hotel sector.

7.4 The expansion of the Natural Gas Grid opens the market for high efficiency natural gas technologies

The expansion of the natural gas network in Sharm El Sheikh and Hurghada is opening markets for

natural gas technologies as cogeneration or trigeneration plants, absorption chillers of high efficiency

boilers (low temperature boilers).

This conversion from diesel or electrical technologies to natural gas technologies requires large

investments after detail a feasibility study is performed.

Implications

Manufacturing38

companies have already detected the relevance of this new market. However, the lack of

financing is a barrier for the penetration of these new technologies. At the same time, the NG

Distribution Company (DSO) is not financing the upfront cost of connection from the end users.

Recommendations

We recommend further investigating these issues with the vendors and DSO, to set out possible

packages for the promotion of high EE gas technologies including the connection costs in the hotel

sector.

7.5 Renewable energy technologies have a great run but more “local success histories” are needed

SWH, Solar PV panels, concentrated solar power plants, biogas plants and small wind turbines have a

great future in the area due to the optimal conditions for these technologies in the Sinai and Red Sea.

Implications

In the meantime, while international prices of the technologies decrease and the performance improves,

it is time to promote these technologies so the lack of awareness and references will not be a problem in

the future with an increasing energy prices perspective.

Recommendations

We recommend further investigating these issues with the National Institutions and International Donors,

to set out possible pilots projects of promising renewable technologies in the hotel sector.

38

Hitachi sell already absorption chillers in some hotels

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7.6 Potential for large investments in singular projects

There are some specificities in the sector that would require a different approach of the one by one hotel

or chain of hotels that should be analysed in detail, but could probably demand high investments with

high returns a huge CO2 savings. One example might be a cogeneration of Desalinated Sea Water (DSW)

and electricity using Concentrated Solar Power (CSP) in isolated areas, such as Marsa Alam or large CHP

plants with district cooling in Sharm El Sheikh or Hurghada.

Implications

These singular projects cannot be upfront by individual resorts; they require the coordination and

integration of several groups of hotels with a common target, which is reducing the energy costs,

guarantee of supply and sustainability.

Recommendations

We recommend identifying key players and leaders that would be proactive in large scale projects, as

well as analyse the possibility of collecting international funds for this kind of projects.

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ANNEXES

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8 Annex A: Energy prices

The energy prices used for the calculations are detailed in the following bullets.

8.1 Electrical Prices

8.1.1 Electrical Tariff for connected areas

The average electrical energy prices for hotels connected to the utility grid is 0.31 EGP/kWh including

taxes.

8.1.2 Electrical Prices for non-connected areas

For customers who generate their electricity, the applied costs are:

0.35 EGP/kWh for variable costs (fuel).

0.38 EGP/kWh for fixed costs (amortization and depreciation, operation and maintenance).

For independent power providers in remote areas, the electrical energy selling prices to customers are:

0.55 to 0.62 EGP/kWh.

8.2 Fuel Prices

8.2.1 Natural Gas

The natural gas cost for connected hotels is 2.65 USD/million Btu.

8.2.2 Diesel

The diesel costs are 1.1 EGP/ litre

8.2.3 Liquefied Petroleum Gas (LPG)

The LPG cost is 1080 EGP/ton for distance from Cairo not exceeding 550 km and for longer distances the

cost reaches 2250 EGP/ton. 80% of the supply cost is related to the transportation fees, which shows the

severe subsidy in LPG cost.

8.3 Water Prices

The water price for hotels connected to the governmental utility is rated at 3 EGP/m3. For the hotels in

Sinai and Red Sea, the water supply is self-generated via water desalination plants. The costs for this

water supply ranges from 4.5 to 14 EGP/m3. This variation in water costs is caused by the source of the

electrical power supply, depending whether it comes from the utility grid or self power generation plants

or the independent power providers.

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9 Annex B: List of resorts that participate in the

survey

1 Iberotel Dahabeya -

2 Tulip Beach Resort Marsa Alam

3 H8-4#313@NRS Saraya 4 H8-4#313@NRS 5 Sol Y Mar Club Makadi 6 Iberotel Coraya Beach. 7 Iberotel Lamaya 8 Iberotel Samaya beach 9 Sol Y Mar Solaya 10 H6-5#364@MA 11 Iberotel Lamaya Resort 12 Iberotel Samaya Resort 13 Sol Y Mar Dar El Madina 14 Jaz Makadi Star 15 Solymar Sea Star - 16 Sol Y Mar Makadi Sun 17 SensiMar Makadi 18 H8-4#313@NRS Oasis 19 Jaz Makadi Bayview 20 Renissance Golden View, 21 Alibaba palce 22 H4-5#500@S Sharm El Shiekh Resort 23 Swiss Inn Resort El Arish 24 Sheraton Miramar Hotel, 25 Aladdin Beach Resort 26 Palm Beach Resort 27 Soly Mar Club Makadi 28 Achtegnburger 29 Sheraton Miramar 30 Movenpeick Hotel 31 Sun Rise garden Beach 32 Sun Rise Festival 33 Sunrise Select Royal Makadi Resort 34 Titanic Resort&Aqua Park 35 Kiriazi Touristic Vilage 36 Pichalpatros hotels 37 Albatros Club 38 Albatros Palace 39 H6-5#364@MA 40 Solymar Dar El Madina 41 Intercotinemtal 42 Jaz Makadi Bayview 43 Iberotel Lamaya Resort 44 Helton El-Nour Resort 45 Elsamaka village 46 Jasmin Resort 47 Royal palace Hotel 48 Gand Hotel Resort 49 Siva Grand Hotel Resort 50 Conrad Hotel 51 Marriot Hotel 52 Helton Hurghada Hotel 53 Desert Rose Resort

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54 Almass GOLDEN fIVE hotel 55 Golden Five Hotel 56 Panorama Panglos Hotel 57 Grand Makadi Hotel 58 Prima life makadi Hotel 59 REBENSON ABU SOMA HOTEL 60 Sheraton Soma BAY 61 Movenpik hotel 62 Kahramana Resort 63 Blu Reef Resort 64 Alfiston VALIGE 65 Coral Beach Diving 66 Shams ALAM Resort 67 Dana Beach Hotel 68 H8-4#313@NRS 69 H8-4#313@NRS Oasis 70 Saraya Palms hotel 71 Iberotel Samaya Resort 72 SensiMar Makadi 73 Sol Y Mar Solaya 74 Jaz Makadi Star 75 SEA STAR BOREVAGE HOTEL 76 Sindbad Valiage 77 Obray Sahel Hasheesh 78 Xperience Kiroseiz Parkland 79 Concorde El Salam Hotel sharm El Sheikh 80 Sonesta Club - Sharm El Shiekh 81 Akassia Swiss Resort - Lti-Club Calimara

82 Sonesta Beach Resort&Casino - Sharm ElSheikh

83 Hurghada Marriott - 84 Sheraton Soma Bay Resort, 85 Gafy resort Sharm 86 Sheraton sharm hotel 87 Hotel Ali Baba Palace, 88 Zahabia Hotel 89 Sunrise Garden Crystal Bay - 90 KING TUT RESORT 91 HAWAY RESORT 92 Aladdin Beach Resort 93 Tia Heights Makady Bay

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10 Annex C: Market Survey

The results are presented below:

Survey Name: Apr 09 2013 Survey Response Status: Partial & Completed

Filter: None May 06, 2013 6:46:58 AM

1. Please, indicate the name of the hotel and your email address to receive the global results of the survey and a personal invitation to assist to the final workshop:

93 Response(s)

2. Indicate the position you have in the hotel :

Response

Ratio Owner 17.10%

General manager 11.10%

Front desk manager 0.00%

Maintenance manager 12.10%

Others 59.50%

No Responses 0.00%

Total 100%

3. Does your hotel belong to a chain or group of hotels?

Response

Ratio No 7.0%

Yes- Specify: 80.8%

No Responses 12.1%

Total 100%

94 Comment(s)

4. Year of construction of the hotel AND/OR

97 Response(s)

5. Year of the last important refurbishment

80%

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6. If any refurbishment, please specify which:

Response

Ratio General Overhaul 26.20%

Bedrooms & Restaurants 37.30%

Cooling System 6.00%

Hot Water System 3.00%

Other 5.00%

No Responses 22.20%

Total 100%

7. Please, indicate the category of the hotel:

Response

Ratio Five star 51.50%

Four star 41.40%

Three star 5.00%

Two star 0.0%

One star 0.0%

Unclassified 0.0%

No Responses 2.0%

Total 100%

8. Please, indicate the number of rooms:

Response

Ratio < 100 rooms 2.00%

101 - 300 rooms 30.30%

301 - 500 rooms 35.30%

> 500 rooms 30.30%

No Responses 2.00%

Total 100%

9. The hotel is operating:

Response

Ratio 365 days 96.9%

Between 300 and 350 days 0.0%

Between 240 and 300 days 1.0%

Less than 240 days 0.0%

No Responses 2.0%

Total 100%

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10. Our guest considers important that the hotel is committed with the environment

Response

Ratio Yes 84.8%

No 0.0%

Only for some 11.1%

I don't care 1.0%

No Responses 3.0%

Total 100%

11. Do you periodically control energy and water consumption?

Response

Ratio Yes 85.8%

No 2.0%

Partially 9.0%

No Responses 3.0%

Total 100%

12. Do you know the ratio of energy and water costs over the hotel regarding sales?

Response

Ratio Yes 82.8%

No 8.0%

Partially 7.0%

No Responses 2.0%

Total 100%

13. If yes, what is the percentage?

Response

Ratio 0 to 4% 40.40%

5 to 9% 39.30%

10 to 15% 10.10%

No Responses 10.10%

Total 100%

14. Cooling facilities are:

Response

Ratio Between 0 to 10 years 37.30%

Between 10 to 20 years 53.50%

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> 20 years 9.00%

No Responses 0.00%

Total 100%

15. The age of hot water installations (boiler, tanks and pumps) is:

Response

Ratio Between 0 to 10 years 41.40%


> 20 years 6.00%

No Responses 0.00%

Total 100%

16. Please specify the fuel used by the hotel for the HVAC:

Response

Ratio Electricity 91.90%

Natural Gas 4.00%

Others 2.00%

No Responses 2.00%

Total 100%

17. Please specify the fuels used to heat the hot water in the hotel:

Response

Ratio Electricity 38.30%

Natural Gas 11.10%

Diesel 44.40%

Solar Energy 4.00%

LPG 0.00%

Other 2.00%

No Responses 1.00%

Total 100%

18. If any, identify additional facilities at the hotel:

Response

Ratio Heated swimming pool 64.6%

Laundry 18.1%

Convention center 1.0%

Spa 0.0%

Sport Facilities 7.0%

Other 8.0%

No Responses 1.0%

Total 100%

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19. What was the increase of the electricity cost last year?

Response

Ratio Not known 51.5%

Less than 5% 21.2%

Between 5 to 10% 16.1%

More than 10% 10.1%

No Responses 1.0%

Total 100%

20. What was the increase of fuel last year?

Response

Ratio Not known 43.4%

Less than 5% 30.3%

Between 5 to 10% 15.1%

More than 10% 10.1%

No Responses 1.0%

Total 100%

21. In the last three years, did you implement any energy conservation measures in the hotel?

Response

Ratio Yes 80.8%

No 10.1%

I am not sure; I have to check 6.0%

No Responses 3.0%

Total 100%

22. If yes, please indicate which of the following measures has been implemented:

Response

Ratio Lighting 93.5%

Better glazing/windows 3.2%

Smart thermostats in rooms 8.6%

Solar water heaters 39.7%

High efficiency boilers 31.1%

High efficiency chillers 20.4%

Other 3.2%

Total 100%

AF-MERCADOS EMI


23. Which should be the two major conservation measures for reducing energy and water costs at your hotel? (Indicate the two most important)

Response

Ratio HVAC 31.60%

Lighting 56.10%

Kitchen 69.30%

Hot water 74.40%

Spa / Swimming pool 21.40%

Laundry 33.60%

Other 0.0%

Total 100%

24. Indicate the system used for cooling the rooms:

Response

Ratio They have no air conditioning 3.0%

Fan-coils with water pipes 9.0%

Split units 80.8%

Only fresh air 4.0%

No Responses 3.0%

Total 100%

25. Does the hotel have a centralized cooling system?

Response

Ratio Yes 28.2%

No 67.6%

I am not sure 3.0%

No Responses 1.0%

Total 100%

26. If yes, please specify the brand name of the cooling system:

25 Response(s)

27. The temperature in the rooms is controlled by an energy managing system

Response

Ratio Yes 46.4%

No 49.4%


No Responses 1.0%

AF-MERCADOS EMI


Total 100%

28. Can the client manipulate the temperature in his/her room?

Response

Ratio There is no air conditioning 0.0%

Yes, freely 82.8%

Only from 22 to 26 ºC 4.0%

Only +/- 3ºC 0.0%

Yes 11.1%

No 0.0%


No Responses 1.0%

Total 100%

29. Water supply in the hotel is:

Response

Ratio External 32.3%

Own, by osmosis or by means of a desalinization plant 62.6%

Own, water extracted from wells 3.0%

Discontinuous external supply and water tank truck 0.0%

No Responses 2.0%

Total 100%

30. The water quality is negatively affecting the installations

Response

Ratio No, the quality is good 48.4%

Yes, it affects the customer's opinion and produces continuous breakdowns 8.0%

Partially, equipment is replaced on a regular basis but the customer does not perceive it 41.4%

No Responses 2.0%

Total 100%

31. Did you install water saving devices (aerators) in the bathroom taps?

Response

Ratio Yes 77.7%

No 16.1%

I am not sure 3.0%

No Responses 3.0%

Total 100%

AF-MERCADOS EMI


32. Select the technologies that you would be interested in implementing in the hotel:

Response

Ratio Solar water heaters 90.70%

Photovoltaic panels 8.20%

Geothermal 3.00%

Cogeneration 14.40%

Lighting 79.30%

None 1.00%

Total 100%

33. Which is the most important barrier when implementing an energy efficiency project?

Response

Ratio Lack of finance 74.70%

Lack of knowledge 4.00%

Lack of guaranties 0.00%

Lack of profitability 3.00%

Lack of information 10.10%

Other 7.00%

No Responses 1.00%

Total 100%

34. I will invest in an energy efficiency (EE) project in the case the simple payback is:

Response

Ratio Less than 2 years 9.00%



Over 6 years 33.30%

No Responses 3.20%

Total 100%

35. If you decide to invest, will you do it with own resources or with bank financing?

Response

Ratio Own resources 10.1%

Credit line 85.8%

Other 1.0%

No Responses 3.0%

Total 100%

AF-MERCADOS EMI


36. Will you allow a third company to invest in an EE project in your hotel signing a long term services contract?

Response

Ratio Never 3.00%

Only if they guarantee results 91.90%

Other 1.00%

No Responses 4.00%

Total 100%

37. Would you prefer to pay your hot water demand rather than producing your own hot water?

Response

Ratio Yes 5.0%

No 11.10%

I don't understand the system 3.00%

If cheaper, I will consider it 78.70%

No Responses 2.00%

Total 100%

AF-MERCADOS EMI


Payback IRR NPV Payback IRR NPV

ECM-2 Solar Water Heater 1126 m2 1,837,715 197,689 264,457 28,448 0.0% 36.8% 0.0% 570 6 14.4 -48,783 7 12.2 -234,040

ECM-3

Centralizing individual cooling system (splits in rooms) with

BMS 1101 kW 3,164,135 340,376 228,360 24,565 7.7% 0.0% 0.0% 367 2 46.2 904,596 2 38.8 670,814

ECM-4

Heat recovery at the central cooling system to produce hot

water - 150,000 16,136 38,063 4,095 0.0% 5.3% 0.0% 82 4 26.6 92,547 4 22.5 58,120

ECM-5

Improvement of the insulation of distribution systems and

tanks - 150,000 16,136 34,257 3,685 0.0% 4.8% 0.0% 74 4 24.0 70,249 5 20.3 40,282

ECM-6

Improvement the efficienciency of the reverse osmosis (RO)

desalination plant through a pressure exchanger - 650,000 69,923 178,939 19,249 6.0% 0.0% 0.0% 287 3 28.7 483,035 4 24.4 317,452

ECM-7

Reducing cooling demand in common areas by temperature

control - 60,000 6,454 44,735 4,812 1.5% 0.0% 0.0% 72 1 72.4 209,889 1 60.1 161,544

ECM-8 Improvement of the lighting system in outdoor areas 469 units 131,680 14,165 104,349 11,225 3.5% 0.0% 0.0% 168 1 76.7 496,788 1 63.5 383,457

ECM-9 Improvement of the lighting system in common areas 291 units 88,000 9,466 64,697 6,960 2.2% 0.0% 0.0% 104 1 71.5 302,485 1 59.3 232,649

ECM-10

Improvement the performance of the pumping system (inverter

technology) - 150,000 16,136 35,748 3,846 1.2% 0.0% 0.0% 57 4 25.0 78,982 4 21.2 47,268

ECM-11 Glazing and double glass windows - 210,000 22,590 47,717 5,133 1.6% 0.0% 0.0% 77 4 23.8 96,925 5 20.2 55,256

ECM-12 Water conservation - 420,000 45,181 246,646 26,532 0.0% 0.0% 10.0% 125 1 58.0 1,079,674 2 48.5 819,170

ECM-13 Cover for the pools - 200,000 21,515 134,814 14,502 0.0% 1.6% 5.0% 87 1 65.9 615,849 1 54.9 471,456

ECM-14 Photovoltaic pannels 15 kW 340,890 36,671 24,015 2,583 0.8% 0.0% 0.0% 39 11 3.8 -155,744 12 3.1 -160,908

Estimated

CAPEX

(EUR)Measure

ID Measure Description

Size

Estimated

CAPEX

(EGP)

Electricity

savings

Diesel

savings

Water

savings

Estimated

Anual

Saving

(EGP)

Estimated

Anual

Saving

(EUR)

Financial results

Pre-tax After-tax

CO2

Saving

(tCO2/yr)

11 Annex D: Walk Trough Audits in eleven seven resorts

11.1 H1-4#369@S (Sharm El Sheikh, 4*, #369)

Concept

EGP 2.570.112

% 48%

kWh 8.159.087

EGP

/kWh0,315

EGP 618.915

% 12%

l 562.650

EGP /l 1,10

EGP 2.125.556

% 40%

m3 265.695

EGP

/m38,00

TOTAL EGP 5.314.583

Occupancy % 78%

PAX # 255.259

Cost per PAX EGP 20,8

Electricity per PAX kWh 31,96

NG per PAX kWh 0

Diesel per PAX l 2,20

LPG per PAX kWh 0

Water per PAX m3 1,041

Water

PERFORMANCE INDICATORS

Electricity

Diesel

AF-MERCADOS EMI



ECM-1 Solar Water Heater 3.090 m2 4,915,753 528,803 735,696 79,141 0.0% 37.8% 0.0% 1,585 6 15.1 35,261 7 12.8 -493,438

ECM-2

Heat recovery at central cooling system for hot water

production - 348,339 37,472 97,314 10,468 0.0% 5.0% 0.0% 210 3 29.1 267,180 4 24.7 176,779

ECM-3

Optimization of the hot water production and

distribution systems - 220,000 23,666 48,657 5,234 0.0% 2.5% 0.0% 105 4 23.2 93,737 5 19.7 51,644

ECM-4 Reducing the cooling demand in common areas - 85,000 9,144 51,756 5,568 0.9% 0.0% 0.0% 83 1 60.0 229,284 2 50.1 174,407ECM-5 Improvement of the lighting system in outdoor areas 3,103 253,912 27,314 182,182 19,598 3.2% 0.0% 0.0% 293 1 69.4 635,523 1 57.9 486,422

ECM-6 Improvement of the lighting system in common areas 2,793 228,521 24,583 122,973 13,229 2.1% 0.0% 0.0% 197 2 52.5 379,299 2 44.0 283,643

ECM-7 Glazing and double glass windows at common areas - 185,000 19,901 51,756 5,568 0.9% 0.0% 0.0% 83 3 26.3 82,402 4 22.1 49,895

ECM-8 Improvement the performance of the pumping system - 175,000 18,825 57,507 6,186 1.0% 0.0% 0.0% 92 3 31.6 118,128 3 26.6 79,342

ECM-9 Water conservation - 235,000 25,280 147,356 15,852 0.0% 0.0% 5.5% 75 1 53.1 219,393 1 44.0 162,045


ECM-11 Photovoltaic panels 15 kW 340,898 36,671 24,015 2,583 0.4% 0.0% 0.0% 39 11 3.8 -155,751 12 3.1 -160,914

Measure

IDMeasure Description Size

Estimated

CAPEX

(EGP)

Estimate

d CAPEX

(EUR)

Estimated

Anual

Saving

(EGP)

Estimated

Anual

Saving

(EUR)

CO2

Saving

(tCO2/y

r)

Financial Results

Pre-tax After-taxElectricity

savings

Diesel

savings

Water

savings


Concept

EGP 4.955.870

% 55%

kWh 15.732.922

EGP /kWh 0,315

EGP 1.677.280

% 19%

l 1.524.800

EGP /l 1,10

EGP 2.308.888

% 26%

m3 288.611

EGP /m3 8,00

TOTAL EGP 8.942.038

Occupancy % 92%

PAX # 367.598


Electricity per

PAXkWh 42,80

NG per PAX kWh 0


LPG per PAX kWh 0



Electricity

Diesel

Water

AF-MERCADOS EMI



ECM-1 Solar Water Heater 1.155 m2 1,837,715 197,689 264,456 28,448 0.0% 27.0% 0.0% 570 6 14.4 -48,787 7 12.2 -234,043

ECM-2

Heat recovery system for the central cooling

system from Absorption Chiller exhausts - 350,000 37,651 53,871 5,795 0.0% 5.5% 0.0% 116 6 15.7 11,235 6 13.3 -28,153

ECM-4 Absorption Chillers 9500 kW 4,798,871 516,230 1,048,940 112,838 55.0% 0.0% -24.6% 466 4 22.9 1,971,933 5 19.5 1,068,303

ECM-5 PV pannels 10 kW 227,265 24,448 16,010 1,722 0.3% 0.0% 0.0% 26 11 3.8 -103,834 12 3.1 -107,276



Measure ID Measure DescriptionEstimated

CAPEX

(EGP)

Estimated

CAPEX

(EUR)

Size

Estimated

Anual

Saving

(EGP)

Financial Results


savings

Diesel

savings

Water

savings

Estimated

Anual

Saving

(EUR)

CO2

Saving

(tCO2/y

r)


EGP 5.130.604

% 62%

kWh 16.287.633

EGP /kWh 0,315

EGP 844.089

% 10%

l 767.354

EGP /l 1,10

EGP 185.542

% 2%

kg 171.798

EGP /kWh 1,08

EGP 2.079.420

% 25%

m3 259.928

EGP /m3 8,00

TOTAL EGP 8.239.656

Occupancy % 83%

PAX # 247.672


Electricity per

PAXkWh 65,76

NG per PAX kWh 0


LPG per PAX kg 0,69



Electricity

Diesel

LPG

Water

AF-MERCADOS EMI



ECM-2 Solar Water Heater 391 m2 622,349 66,948 93,141 10,020 0.0% 12.0% 0.0% 201 6 15.1 4,464 7 12.8 -62,471

ECM-3 Cooling system (Network) 700,000 75,301 129,960 13,980 2.8% 0.0% 0.0% 209 5 19.3 152,630 6 16.4 47,822

ECM-4 Absorption Chillers 7.111 kW 3,555,350 382,460 950,410 102,239 55.0% 0.0% -23.0% 624 3 27.9 2,476,051 4 23.7 1,603,556

ECM-5

Heat recovery system for the central cooling system From Absorption

Chiller exhausts for hot water - 380,000 40,878 52,927 5,693 0.0% 5.5% 0.0% 92 6 13.9 -20,382 7 11.7 -56,630

ECM-6 Glazzing and double glass - 560,000 60,241 129,960 13,980 2.8% 0.0% 0.0% 209 4 24.3 274,369 5 20.7 160,069

ECM-7 Reducing water demand - 450,000 48,408 219,894 23,655 0.0% 0.0% 11.5% 111 2 49.0 896,873 2 41.1 669,745

ECM-8 PV pannels 10 kW 227,265 24,448 16,010 1,722 0.3% 0.0% 0.0% 26 11 3.8 -103,834 12 3.1 -107,276

ECM-9

Improvement the efficienciency of the reverse osmosis (RO) desalination

plant through a pressure exchanger - 1,200,000 129,088 354,436 38,128 7.5% 0.0% 0.0% 569 3 30.7 1,032,864 4 26.0 698,950

Measure ID Measure DescriptionEstimated

CAPEX (EGP)Size

Estimated

CAPEX

(EUR)

CO2

Saving

(tCO2/yr

)

Financial Results


savings

Diesel

savings

Water

savings

Estimated

Anual Saving

(EGP)

Estimated

Anual

Saving

(EUR)


AF-MERCADOS EMI



ECM-1 Fuel switching (from diesel to natural gas) - 2,000,000 215,146 382,311 41,126 0.0% 100.0% 0.0% 408 5 21.6 740,927 5 18.5 380,506

ECM-2 Solar Water Heater 613 m2 974,984 104,882 145,917 15,697 0.0% 16.8% 0.0% 314 6 15.1 6,991 7 12.8 -97,870

ECM-3

Heat recovery at the central cooling system to produce

hot water - 202,085 21,739 56,456 6,073 0.0% 6.5% 0.0% 122 3 29.1 155,002 4 24.7 102,557

ECM-5 House settings oppotunities - 150,000 16,136 45,384 4,882 1.4% 0.0% 0.0% 73 3 31.4 135,434 4 26.6 92,430



ECM-8 Glazzing and double glass windows - 280,000 30,120 75,641 8,137 2.3% 0.0% 0.0% 121 3 28.2 199,637 4 23.9 129,997


ECM-10 Air curtains - 165,000 17,750 75,641 8,137 2.3% 0.0% 0.0% 121 2 44.8 212,057 2 37.6 155,352

ECM-11 PV pannels 15 kW 340,898 36,671 24,015 2,583 0.7% 0.0% 0.0% 39 11 3.8 -155,751 12 3.1 -160,914

ECM-12 Cover for the pools 160,000 17,212 77,039 8,287 0.0% 1.0% 3.8% 53 2 41.2 115,852 2 34.2 82,406

Measure ID Measure DescriptionEstimate

d CAPEX

(EGP)

SizeEstimated

CAPEX

(EUR)

CO2

Saving

(tCO2/yr

)

Including Subsidy


savings

Diesel

savings

Water

savings

Estimated

Anual

Saving

(EGP)

Estimated

Anual

Saving

(EUR)


Baseline

EGP 2.897.153

% 56%

kWh 9.197.312

EGP

/kWh0,315

EGP 748.507

% 14%

l 680.461

EGP /l 1,10

EGP 1.570.819

% 30%

m3 196.352

EGP

/m38,00

TOTAL EGP 5.216.479

Occupancy % 52%

PAX # 123.604


Electricity per

PAXkWh 74,41

NG per PAX kWh 0


LPG per PAX kWh 0



Electricity

Diesel

Water

AF-MERCADOS EMI



ECM-1Centralizing individual cooling system (splits in rooms) with

BMS692 kW 1,590,000 171,041 200,362 21,554 7.7% 0.0% 0.0% 184 1 77.4 956,078 1 64.1 738,298

ECM-2 Solar Water Heater 492 m2 782,939 84,223 317,913 34,199 10.6% 14.7% 0.0% 346 2 41.3 1,181,567 3 34.8 862,170

ECM-3 Improvement of the lighting system in common areas 3,064 250,642 26,962 35,682 3,838 1.4% 0.0% 0.0% 33 6 9.1 -50,234 7 7.5 -61,900

ECM-4 Improvement of the lighting system in outdoor areas 4,289 350,899 37,747 49,954 5,374 1.9% 0.0% 0.0% 46 6 9.1 -70,328 7 7.5 -86,661



ECM-7 Glazzing and double glass windows - 155,000 16,674 29,307 3,153 1.1% 0.0% 0.0% 27 5 15.5 2,968 5 13.0 -11,053


Estimated

Anual

Saving

(EGP)

Estimated

Anual

Saving

(EGP)

Estimated

CAPEX

(EUR)

Measure ID Measure Description

Estimated

CAPEX

(EGP)

SizeCO2 Saving

(tCO2/yr)

Including Subsidy


savings

Diesel

savings

Water

savings

11.6 H6-5#364@MA (Marsa Alam, 5*, #364)

Baseline

EGP 2.236.338

% 70%

kWh 4.066.070

EGP

/kWh0,550

EGP 252.633

% 8%

l 229.667

EGP /l 1,10

EGP 727.006

% 23%

m3 90.876

EGP

/m38,00

TOTAL EGP 3.215.977

Occupancy % 57%

PAX # 152.122


Electricity per

PAXkWh 26,73

NG per PAX kWh 0


LPG per PAX kWh 0



Electricity

Diesel

Water

AF-MERCADOS EMI


Size


ECM-1Centralizing individual cooling system (splits in

rooms) with BMS492 kW 1,129,884 121,545 142,381 15,316 11.5% 0.0% 0.0% 131 1 77.4 679,408 1 64.1 524,650

ECM-2 Solar Water Heater 783 m2 1,618,759 174,135 317,151 34,117 15.1% 70.0% 0.0% 451 5 20.5 450,308 5 17.4 188,468

ECM-3Improvement of the lighting system in common

areas192 units 15,674 1,686 2,231 240 0.2% 0.0% 0.0% 2 6 9.1 -3,142 7 7.5 -3,872

ECM-4Improvement of the lighting system in outdoor

areas447 units 36,572 3,934 5,207 560 0.4% 0.0% 0.0% 5 6 9.1 -7,329 7 7.5 -9,032



ECM-7Improvement the performance of the pumping

system- 65,000 6,992 18,595 2,000 1.5% 0.0% 0.0% 17 3 30.6 66,069 4 26.7 47,224

CO2

Saving

(tCO2/yr)

Including Subsidy


savings

Diesel

savings

Water

savings

Estimated

Anual Saving

(EGP)

Estimated

Anual

Saving

(EUR)

Estimated

CAPEX

(EUR)


Estimated

CAPEX

(EGP)

11.7 H7-4#140@MA (Marsa Alam, 4*, #140)

Baseline

EGP 1.068.297

% 67%

kWh 1.942.358

EGP

/kWh0,550

EGP 159.325

% 10%

l 144.841

EGP /l 1,10

EGP 359.230

% 23%

m3 44.904

EGP

/m38,00

TOTAL EGP 1.586.852

Occupancy % 82%

PAX # 87.680


Electricity per

PAXkWh 22,15

NG per PAX kWh 0


LPG per PAX kWh 0



Electricity

Diesel

Water

AF-MERCADOS EMI


Size


ECM-1Centralizing individual cooling system (splits in rooms)

with BMS1184 kW 2,719,919 292,590 196,300 21,117 10.6% 0.0% 0.0% 315 2 46.2 777,599 2 38.8 576,638

ECM-2 Solar Water Heater 388 m2 803,352 86,419 224,187 24,117 12.1% 0.0% 0.0% 360 3 29.1 614,760 4 24.7 406,558

ECM-3 Improvement of the lighting system in common areas 1,612 131,926 14,192 10,756 1,157 0.6% 0.0% 0.0% 17 10 5.7 -51,705 11 4.8 -55,364

ECM-4 Improvement of the lighting system in outdoor areas 1,612 131,926 14,192 10,756 1,157 0.6% 0.0% 0.0% 17 10 5.7 -51,705 11 4.8 -55,364


ECM-6 Improvement the performance of the pumping system - 75,000 8,068 11,832 1,273 0.6% 0.0% 0.0% 19 6 11.3 -9,603 6 9.4 -14,179

ECM-7 Glazing and double glass windows at common areas - 70,000 7,530 22,087 2,376 1.2% 0.0% 0.0% 35 3 30.2 42,945 3 25.4 28,292

Estimated

CAPEX

(EUR)

CO2

Saving

(tCO2/yr)

Including Subsidy


savings

Diesel

savings

Water

savings

Estimated

Anual

Saving

(EGP)

Estimated

Anual

Saving

(EGP)

Measure

IDMeasure Description

Estimated

CAPEX

(EGP)

11.8 H8-4#313@NRS (Makadi, 5*, #313)

Baseline

EGP 1.594.720

% 72%

kWh 5.062.603

EGP

/kWh0,315

EGP 633.201

% 28%

m3 79.150

EGP

/m38,00

TOTAL EGP 2.227.921

Occupancy % 70%

PAX # 182.985


Electricity per

PAXkWh 27,67

NG per PAX kWh 0


LPG per PAX kWh 0



Electricity

Water

AF-MERCADOS EMI


Size



BMS1157 kW 3,323,721 357,543 239,878 25,804 7.7% 0.0% 0.0% 385 2 46.2 950,220 2 38.8 704,647


ECM-3 Improvement of the lighting system in common areas 10246 units 523,940 56,362 42,719 4,595 1.4% 0.0% 0.0% 69 10 5.7 -205,345 11 4.8 -219,875

ECM-4 Improvement of the lighting system in outdoor areas 6404 units 838,305 90,179 68,350 7,353 2.2% 0.0% 0.0% 110 10 5.7 -328,552 11 4.8 -351,801

ECM-6Improvement of the insulation of distribution systems and

tanks- 1,500,000 161,360 287,938 30,974 0.0% 11.2% 0.0% 620 5 20.0 382,439 5 17.0 146,775

ECM-7 Improvement the performance of the pumping system - 250,000 26,893 46,991 5,055 1.5% 0.0% 0.0% 75 5 15.4 3,481 5 12.8 -18,872



ECM-10 Glazing and double glass Windows - 240,000 25,818 50,124 5,392 1.6% 0.0% 0.0% 80 4 18.0 26,902 5 15.1 730


Estimated

CAPEX

(EGP)

Estimated

CAPEX

(EUR)

Estimated

Anual

Saving

(EGP)

Estimated

Anual

Saving

(EUR)

CO2 Saving

(tCO2/yr)

Including Subsidy


savings

Diesel

savings

Water

savings

11.9 H9-5#700@NRSi (Makadi, 5*, #700)

Baseline

EGP 2.699.739

% 37%

kWh 8.570.599

EGP

/kWh0,315

EGP 2.206.780

% 30%

l 2.006.164

EGP /l 1,10

EGP 2.427.248

% 33%

m3 303.406

EGP

/m38,00

TOTAL EGP 7.333.767

Occupancy % 94%

PAX # 500.456


Electricity per

PAXkWh 17,13

NG per PAX kWh 0


LPG per PAX kWh 0



Electricity

Diesel

Water

AF-MERCADOS EMI


Size



BMS716 kW 2,055,366 221,102 148,339 15,957 8.5% 0.0% 0.0% 238 2 46.2 587,610 2 38.8 435,749

ECM-2Improvement the performance of the pumping system

(inverter technology)- 187,650 20,186 39,411 4,240 2.3% 0.0% 0.0% 63 4 18.2 22,071 5 15.2 1,401


ECM-4 Recover cool air in ventilation systems - 500,000 53,787 174,353 18,756 10.0% 0.0% 0.0% 280 3 35.9 586,607 3 30.4 416,227



ECM-7Improvement of the insulation of distribution systems and

tanks- 110,000 11,833 45,031 4,844 0.0% 9.0% 0.0% 97 2 41.6 168,145 3 35.1 122,843


ECM-9 Glazing and double glass Windows - 135,000 14,522 30,828 3,316 1.8% 0.0% 0.0% 50 4 20.4 27,511 4 17.1 10,314


Diesel

savings

Water

savings

CO2

Saving

(tCO2/yr

)

Including Subsidy


savings

Estimated

CAPEX

(EUR)

Estimated

Anual Saving

(EGP)

Estimated

Anual

Saving

(EUR)


Estimated

CAPEX

(EGP)

11.10 H10-5#292@NRS (Sahl Hasheish, 5*,#292)

Baseline

EGP 1.509.506

% 56%

kWh 4.792.083

EGP

/kWh0,315

EGP 431.186

% 16%

l 391.988

EGP /l 1,10

EGP 751.811

% 28%

m3 93.976

EGP

/m38,00

TOTAL EGP 2.692.504

Occupancy % 58%

PAX # 128.133


Electricity per

PAXkWh 37,40

NG per PAX kWh 0


LPG per PAX kWh 0



Electricity

Diesel

Water

AF-MERCADOS EMI


IRR NPV IRR NPV


BMS1488 kW 4,273,745 459,740 308,442 49,456 11.5% 0.0% 0.0% 495 2 46.2 1,221,824 2 38.8 906,058

ECM-2 Solar Water Heater 588 m2 988,458 106,332 112,670 11,438 0.0% 38.4% 0.0% 243 8 10.6 -199,491 8 8.9 -264,486

ECM-3 Improvement of the lighting system in common areas 14130 units 71,280 7,668 5,812 825 0.2% 0.0% 0.0% 9 10 5.7 -27,936 11 4.8 -29,913

ECM-4 Improvement of the lighting system in outdoor areas 7841 units 115,267 12,400 10,473 1,334 0.4% 0.0% 0.0% 17 9 7.2 -38,878 10 6.0 -43,334



ECM-7 Glazing and double glass Windows - 120,000 12,909 16,113 1,389 0.6% 0.0% 0.0% 26 7 7.9 -28,613 7 6.5 -33,286


Measure

IDMeasure Description

Estimated

Anual

Saving

(EGP) Payback Payback

Estimated

CAPEX

(EGP)

Size

Estimated

CAPEX

(EUR)

Estimated

Anual

Saving

(EUR)

CO2 Saving

(tCO2/yr)

Including Subsidy


savings

Diesel

savings

Water

savings

11.11 H11-3#522@NRS (Hurghada, 3*, #522)

AF-MERCADOS EMI


12 Annex E: KPIs per square meter

The KPIs used in the hotels sector are related always to the guest per night, due to the main fact that having an empty room or not will change substantially the energy

and water consumption.

In any case the table below summarize the KPIs per square meter in the hotels visited.

H1-4#369@S H2-5#470@S H3-5#400@S H4-5#500@S H5-5#318@S H6-5#364@MA H7-4#140@MAH7-

4#140@MA

H9-

5#700@NRS

H10-

5#292@NRS

H11-

3#522@NRS

Electricity EGP 2,570,112 4,955,870 4,072,631 5,130,604 2,897,153 2,236,338 611,843 1,594,720 2,699,739 1,509,506 2,314,272

% 48% 55% 62% 62% 56% 70% 67% 72% 37% 56% 61%

kWh 8,159,087 15,732,922 12,928,986 16,287,633 9,197,312 4,066,070 1,942,358 5,062,603 8,570,599 4,792,083 7,346,897

EGP /kWh 0.315 0.315 0.315 0.315 0.315 0.550 0.550 0.315 0.315 0.315 0.315

Diesel EGP 618,915 1,677,280 668,898 844,089 748,507 252,633 159,325 0 2,206,780 431,186 252,633

% 12% 19% 10% 10% 14% 8% 10% 0% 30% 16% 7%

l 562,650 1,524,800 608,089 767,354 680,461 229,667 144,841 0 2,006,164 391,988 229,667

EGP /l 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10

LPG EGP 0 0 147,032 185,542 0 0 0 0 0 0 0

% 0% 0% 2% 2% 0% 0% 0% 0% 0% 0% 0%

kWh 0 0 136,141 171,798 0 0 0 0 0 0 0

EGP /kWh 0.00 0.00 1.08 1.08 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Water EGP 2,125,556 2,308,888 1,647,840 2,079,420 1,570,819 727,006 359,230 633,201 2,427,248 751,811 1,204,141

% 40% 26% 25% 25% 30% 23% 23% 28% 33% 28% 32%

m3 265,695 288,611 205,980 259,928 196,352 90,876 44,904 79,150 303,406 93,976 150,518

EGP /m3 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00

TOTAL EGP 5,314,583 8,942,038 6,536,401 8,239,656 5,216,479 3,215,977 1,586,852 2,227,921 7,333,767 2,692,504 3,771,046

Est. Surface # 45,000.0 80,000.0 60,000.0 60,000.0 55,000.0 40,000.0 20,000.0 74,000.0 200,000.0 62,000.0 66,000.0

Cost per

sqmEGP 118.1 111.8 108.9 137.3 94.8 80.4 79.3 30.1 36.7 43.4 57.1

Electricity

per sqmkWh 181.3 196.7 215.5 271.5 167.2 101.7 97.1 68.4 42.9 77.3 111.3

Diesel per

sqml 12.5 19.1 10.1 12.8 12.4 5.7 7.2 0.0 10.0 6.3 3.5

Water per

sqmm3 5.9 3.6 3.4 4.3 3.6 2.3 2.2 1.1 1.5 1.5 2.3

AF-MERCADOS EMI


13 Annex F: Concentrated Solar Power

CogenerationProjectItems

ConcentratedSolarInstalledCapacity(kW)10,000

OperatingLoadFactorforCogenerationPlant90%

ElectricityEfficiency 40%

MinorOverhaulTimeInterval(hrs)10,000

MajorOverhaulTimeInterval(hrs)30,000

OperatingHoursperyear 8,500

MinorOverhaulCost(%ofCogenCost)5%

MajorOverhaulCost(%ofEGSCost)20%

SuplementaryFuelforPeakAvailability10%

NGCost(USD/millionBtu) 3.00

CogenCost(USD/kW) 6,500

DailyProductionofDesalinatedWater(m3)5,000

DiscountRate 15%

DepreciationPeriod(years) 20

EscalationRateforCosts 3%

FuelEscalationRate 5%

ExchangeRate(EGP/USD) 6.95

ElectricityEscalationRate 5%

OperationalParameters 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

GeneratedElectricalEnergy(MWh) 76,500 76,500 76,500 76,500 76,500 76,500 76,500 76,500 76,500 76,500 76,500 76,500 76,500 76,500 76,500 76,500 76,500 76,500 76,500 76,500

Suplementary

FuelDemand

ofCogenPlant

(millionBTU

ofNG) 65,261 65,261 65,261 65,261 65,261 65,261 65,261 65,261 65,261 65,261 65,261 65,261 65,261 65,261 65,261 65,261 65,261 65,261 65,261 65,261

GeneratedWater(m3) 1,825,000 1,825,000 1,825,000 1,825,000 1,825,000 1,825,000 1,825,000 1,825,000 1,825,000 1,825,000 1,825,000 1,825,000 1,825,000 1,825,000 1,825,000 1,825,000 1,825,000 1,825,000 1,825,000 1,825,000

MinorOverhaul X X X X X X

MajorOverhaul X X X X

FuelPricesChange(USD/millionBtu) 3.00 3.15 3.31 3.47 3.65 3.83 4.02 4.22 4.43 4.65 4.89 5.13 5.39 5.66 5.94 6.24 6.55 6.88 7.22 7.58

Chemicalsand

Maintencefor

DesalWater

Production

(EGP/m3) 1.50 1.55 1.59 1.64 1.69 1.74 1.79 1.84 1.90 1.96 2.02 2.08 2.14 2.20 2.27 2.34 2.41 2.48 2.55 2.63

OperationalExpenses(EGP) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

InvestmentCost (451,750,000)

InvestmentDedicatedtoElectricityGeneration(361,400,000)

InvestmentDedicatedtoThermalGeneration(90,350,000)

ElectricityGeneration

FuelCost 1,595,025 1,674,776 1,758,515 1,846,441 1,938,763 2,035,701 2,137,486 2,244,360 2,356,578 2,474,407 2,598,128 2,728,034 2,864,436 3,007,658 3,158,040 3,315,942 3,481,740 3,655,827 3,838,618 4,030,549

MinorOverhaul - 19,170,463 - - - 21,576,525 - - - 24,284,569 - 25,763,499 - - - 28,997,045 - - - 32,636,430

MajorOverhaul - - - 81,351,777 - - - 91,562,141 - - - - - 109,329,985 - - - 123,051,862 - -

StaffCost 3,000,000 3,090,000 3,182,700 3,278,181 3,376,526 3,477,822 3,582,157 3,689,622 3,800,310 3,914,320 4,031,749 4,152,702 4,277,283 4,405,601 4,537,769 4,673,902 4,814,119 4,958,543 5,107,299 5,260,518

TotalCosts 4,595,025 23,935,239 4,941,215 86,476,399 5,315,289 27,090,048 5,719,643 97,496,123 6,156,889 30,673,296 6,629,877 32,644,235 7,141,718 116,743,244 7,695,810 36,986,890 8,295,859 131,666,231 8,945,917 41,927,497

DesalinatedWaterGeneration

MaintenanceCost 2,737,500 2,819,625 2,904,214 2,991,340 3,081,080 3,173,513 3,268,718 3,366,780 3,467,783 3,571,817 3,678,971 3,789,340 3,903,020 4,020,111 4,140,714 4,264,936 4,392,884 4,524,670 4,660,411 4,800,223

StaffCost 1,500,000 1,545,000 1,591,350 1,639,091 1,688,263 1,738,911 1,791,078 1,844,811 1,900,155 1,957,160 2,015,875 2,076,351 2,138,641 2,202,801 2,268,885 2,336,951 2,407,060 2,479,271 2,553,650 2,630,259

TotalCosts 4,237,500 4,364,625 4,495,564 4,630,431 4,769,344 4,912,424 5,059,797 5,211,591 5,367,938 5,528,976 5,694,846 5,865,691 6,041,662 6,222,912 6,409,599 6,601,887 6,799,944 7,003,942 7,214,060 7,430,482

FCF (903,500,000) 17,665,050 56,599,729 18,873,558 182,213,659 20,169,266 64,004,944 21,558,879 205,415,428 23,049,654 72,404,544 24,649,445 77,019,852 26,366,760 245,932,311 28,210,817 87,177,554 30,191,605 277,340,346 32,319,954 98,715,958

TIR 5.4%

NPV (422,877,157)

Years

Years

Thissheetcalculatesforcogenerationplantof

ConcentratedSolarPowerTechnologyratedat

10MW.Thesellingprice(levelizedcost)is

calculatedat1.125EGP/kWhforelectrical

energyandat10.65EGP/m3fordesalinated

water.Thissellingpricewouldachieve15%

IRR.Moreover,thebeneficiaryhotelswould

haveseverereductionintheircarbonfoot

print.

16.67%

9.13%

74.20%

ThermalLoadLevelizedCostDistribu on

Maintenance

Staff

Investment

2.48%

26.29%

4.13%

67.10%

ElectricityLevelizedCostDistribu on

Fuel

Overhaul

Staff

Investment

AF-MERCADOS EMI


sustainable energy support for built · pdf fileexhibit 25- age of the hot water facilities...

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